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2. A 7%, 15 year, semiannual bond has a call price of $1050 (the bonds first call date is in four years). The current market

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2. A 7%, 15 year, semiannual bond has a call price of $1050 (the bonds first call date is in four years). The current market price for the bond is $970. a Calculate the current yield. (2 marks) b. Calculate YTM (2marks) cWhat are the critical assumplions for YTM? (2 marks) d. Calculate YTC. (2 marks) e. You expect the market interest rate to be 6% after 3 years. Calculate the bond price after 3 years if your expectation is right. (2 marks) f. If you sell the bond after 3 years at the bond price calculated from 2e, find the expected return over 3 years. (2 marks)

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