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1.A callable bond with a 9 percent coupon currently has 10 years left to maturity. The interest payments are paid quarterly and the bond is

1.A callable bond with a 9 percent coupon currently has 10 years left to maturity. The interest payments are paid quarterly and the bond is currently selling for $1,200. The call premium is $150.

a.What yield could you expect from the bond if you hold until it matures?

b.What yield could you expect from the bond if it is called back in 5 years?

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