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2)A bond with a par value (a.k.a. face value) of $1,000 that pays 5% is currently priced at $950. What is the nominal (a.k.a. coupon)
2)A bond with a par value (a.k.a. face value) of $1,000 that pays 5% is currently priced at $950. What is the nominal (a.k.a. coupon) interest rate? (Hint: Whats your name, Bob?) Calculate the current yield.
3) Lets assume the bond in problem #2 is a 10-year bond. The face value (a.k.a. par value) is $1,000, the market price is $950, and the coupon (a.k.a. nominal) interest rate is 5%. Calculate the yield-to- maturity.
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