Consider bond paying coupon rate

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Reference no: EM131351818

Consider a bond paying a coupon rate of 8.75% per year semiannually when the market interest rate is only 3.5% per half- year. The bond has three years until maturity.

a) Find the bond's price today and six months from now after the next coupon is paid.

b) What is the total rate of return on the bond?

Reference no: EM131351818

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