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Calculate the expected holding period return

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Calculate the expected holding period return for an investor who purchases a 7.50% two year bond and plans to sell it after one year. The purchase price is $102 the expected market rate fro a one year bond in one year is 6.25% and the bond pays coupon interest semi annually. The bond has $100 face value. Coupons can be reinvested at 6% p.a. until the end of the holding period.

Reference no: EM131625013

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