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QUESTION 5

ABChas issued a bond with the following characteristics:

Par: $1,000;Time to maturity:11 years;Coupon rate: 10%;

Assume annual coupon payments.Calculate the price of this bond if the YTM is 11.4%

1. Youpaid$1,185foracorporatebondthathasa11.45%couponrate.Whatisthecurrentyield?

   Hint:ifnothingismentioned,thenassumeparvalue=$1,000

   Note:Enteryouranswerroundedofftotwodecimalpoints.Donotenter%intheanswerbox.Forexample,ifyouransweris0.12345thenenteras12.35intheanswerbox.

QUESTION 4

1. ABC'sInc.'sbondscurrentlysellfor$1,280andhaveaparvalueof$1,000.Theypaya$135annualcouponandhavea15-yearmaturity,buttheycanbecalledin5yearsat$1,050.Whatistheiryieldtocall(YTC)?