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1. Lambert Co. issued 15-year bonds two years ago at a coupon rate of 7.8 percent. The bonds make semiannual payments. If these bonds currently
1. Lambert Co. issued 15-year bonds two years ago at a coupon rate of 7.8 percent. The bonds make semiannual payments. If these bonds currently sell for 96 percent of the par value, what is the yield to maturity?
a. 6.8% b. 7.2% c. 8.3% d. 8.8%
2. You borrowed $10,000 from a bank today. The current interest rate is 9%. You will make equal monthly payments over next 5 years. How much of the third payment reduces the outstanding balance of the loan?
a. $107.07 b. $115.74 c. $124.91 d. $134.58
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