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1- Which security has a higher effective annual interest rate? a-A 3-month T-bill selling at $97.645 with par value $100.000. b-A coupon bond selling at
1- Which security has a higher effective annual interest rate? a-A 3-month T-bill selling at $97.645 with par value $100.000. b-A coupon bond selling at par and paying a 10% coupon semiannually. 2-Two bonds have identical times to maturity and coupon rates. One is callable at 105, the other at 110. which should have the higher yield to maturity? Why? 3-Consider an 8% coupon bond selling for $953.10 with 3 years until maturity making annual coupon payments. the interest rates in the next 3 years will be with certain r =10% Calculate the yield to maturity and realized compound yield of the bond. 4-Bonds of Zello Corporation with a par value of 1,000$ sell for $960, mature in 5 years and have a 7% annual coupon rate paid semiannually. Calculate the : a-Current yield b-Yield to maturity ( to the nearest whole percent, i.e., 3%, 4%, 5%, etc. ) c-Realized compound yield for an investor with a 3- year holding period and a reinvestment rate of 6% over the period
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