Josh Kavern bought 10-year, 12 percent coupon bonds issued by the U.S.

$1.49 Excluding Tax

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QUESTION:

Josh Kavern bought 10-year, 12 percent coupon bonds issued by the U.S. Treasury three years ago at $913.44. If he sells these bonds, for which he paid the face value of $1,000, at the current price of $804.59, what is his realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments?


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