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1. A bond with 8 years left until maturity has a coupon rate of 9%. Is the price an investor is willing to pay for
1.
A bond with 8 years left until maturity has a coupon rate of 9%. Is the price an investor is willing to pay for this bond less than $1,000, $1,000 or more than $1,000 if he believes the yield to maturity is:
a. 8%
b. 12%
c. 9%
2.
Three investors, 1, 2 and 3, have different yields to maturity for the same bond. The price 1 puts on the bond is $1,025, the price 2 puts on the bond is $985, and the price 3 puts on the bond is $1,055. Rank, from highest to lowest, the investors yields to maturity
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