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1. It is now August 1, 2022, and you are considering the purchase of an outstanding bond that has 7.2% annual coupon and a 20-year

image text in transcribed 1. It is now August 1, 2022, and you are considering the purchase of an outstanding bond that has 7.2% annual coupon and a 20-year maturity, There is an 8 years of call protection (until August 1, 2030), after which time it can be called at 102 - that is, at 102% of par, or $1,020. The bond has a $1,000 par value and is currently selling at or $965. a. What is the yield to maturity? What is the yield to call? b. If you bought this bond, which yield would you more likely to earn? Explain your reasoning. c. Calculate this bond current yield and capital gain yield

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