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1. Bond prices and yields Assume that the Financial Management Corporation's $1,000-par-value bond has a 7.300% coupon, matures on May 15, 2027, has a
1. Bond prices and yields Assume that the Financial Management Corporation's $1,000-par-value bond has a 7.300% coupon, matures on May 15, 2027, has a current price quote of 109.268 and a yield to maturity (YTM) of 6.893%. Given this information, answer the following questions: a. What was the dollar price of the bond? b. What is the bond's current yield? c. Is the bond selling at par, at a discount, or at a premium? Why? d. Compare the bond's current yield calculated in part b to its YTM and explain why they differ. a. The dollar price of the bond is $ (Round to the nearest cent.) b. The bond's current yield is c. The bond is selling at (1)- d. Compare the bond's current yield calculated in part b to its YTM and explain why they differ. The yield to maturity is (3). %. (Round to two decimal places.) because its price is (2). the par value. (Select from the drop-down menus.) than the current yield because the former includes $92.68 in price (4) - between today and the May 15, 2027 bond maturity. (Select from the drop-down menus.) 000 (1) O a discount (2) par equal to less than (3) O lower higher (4) depreciation appreciation a premium greater than
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