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On May 15, -year 2008, a U.S. Treasury note was issued with a May 15, 2013 maturity,$1000 par value and a 8.09%

coupon rate with semiannual payments. An investor bought this note on 11/15/2008 at a yield-to-maturity 4.42%


The investor had to sell the note on 11/15/2011 at the prevailing yield-to-maturity 1.16%. of The investor was careful to invest the coupon payments over the holding period at the rate of 4.42%


Calculate the annualized holding period rate of return. (Hints: Keep all the decimal places of intermediate steps in the calculator. Round off only the final answer in percent to three decimal places. Be consistent while compounding and discounting. The investor does not receive the coupon on the purchase date and receives the coupon on the sale date. Use invoice prices for the purchase and sale cash flows. While annualizing the return, multiply by two the semi-annual rate.)

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