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1:24 Components of Bond Returns Bond A caries an annual coupon of 10 percent and has a residual maturity of 5 years. Bond B carries
1:24 Components of Bond Returns Bond A caries an annual coupon of 10 percent and has a residual maturity of 5 years. Bond B carries an annual coupon of 8 percent and it too has a residual maturity of 5 years. Both the bond have a par value of 1000 and a YTM of 9 percent. Bond A sells at a discount. What is the current yield for Bond-4 and Bond B3 What is the expected capital gains yield over the next one year for Bond A and Bond B? 1.25 Deep Discount Bonds On January 1, 2010 ABC Limited issues a 20-year deen discount hond
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