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QUESTION
Consider an annual coupon bond with a face value of $100, 11 years to maturity, and a price of $85. The coupon rate on the bond is 7%.
Consider an annual coupon bond with a face value of $100, 11 years to maturity, and a price of $85. The coupon rate on the bond is 7%. If you can reinvest coupons at a rate of 1% per annum, then how money do you have if you hold the bond to maturity?
