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1. A Treasury bond reaches maturity in 9 months. Assume that the Treasury bond has a coupon of 3% and the current price of the
1. A Treasury bond reaches maturity in 9 months. Assume that the Treasury bond has a coupon of 3% and the current price of the bond is $99,500. a. Estimate the bond's yield to maturity (based on continuous compounding) using an iterative procedure and a starting value of 0.04. b. Verify that your estimate for the yield to maturity produces a bond value that is within $10 of the current market price. 1. A Treasury bond reaches maturity in 9 months. Assume that the Treasury bond has a coupon of 3% and the current price of the bond is $99,500. a. Estimate the bond's yield to maturity (based on continuous compounding) using an iterative procedure and a starting value of 0.04. b. Verify that your estimate for the yield to maturity produces a bond value that is within $10 of the current market price
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