7. A portfolio manager is considering buying two bonds. Bond A matures in three years and has a coupon rate of 10% payab

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7 A Portfolio Manager Is Considering Buying Two Bonds Bond A Matures In Three Years And Has A Coupon Rate Of 10 Payab 1 (51.36 KiB) Viewed 45 times

7. A portfolio manager is considering buying two bonds. Bond A matures in three years and has a coupon rate of 10% payable semiannually. Bond B, of the same credit quality, matures in 10 years and has a coupon rate of 12% payable semiannually. Both bonds are priced at par. a. What are the YTMs of these bonds? b. What is the Total Dollar Return for Bond A and Bond B if horizon is 3 years, reinvestment rate is 7% and Yield at the time of year 3 is 11%? c. What are the % Return for Bond A and Bond B if horizon is 3 years, reinvestment rate is 7% and Yield at the time of year 3 is 11%. d. What percentage of total Dollar Return are reinvestment amount, capital gain and coupons only for Bond A and Bond B?