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27 June, 08:54

Rosita purchased a bond for $989 that had a 7% coupon and semiannual interest payments. She sold the bond after 6 months and earned a total return of 4.8% on this investment. At what price, did she sell the bond

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  1. 27 June, 09:18
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    The price she sold the bond is $1,001.47

    Explanation:

    The formula for yield return in given as;

    Yield to maturity = (Annual interest + per value - market price : numbers of years to maturity) / per value + market price: 2

    048 = (Selling price + [ (.07 * $1,000) / 2] - $989) / $989

    Making selling price the subject of formula we have this as the abswer

    Selling price = $1,001.47
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