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4. Consider a semi-annual bond with an annual coupon = 3.33%, maturity = 10 years, par value = $1,000, and a market price today =

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4. Consider a semi-annual bond with an annual coupon = 3.33%, maturity = 10 years, par value = $1,000, and a market price today = $863: a. What is its yield to maturity (YTM)? b. If it can be called at $850 at the end of year 8, what is its yield to call? DS A C D B A 1 B 3.33% 2 Coupon 3 Par 4 YTM 5 Cash Flows: 6 Start 7 0.5 8 1.0 9 1.5 10 2.0 11 2.5 12 3.0 13 3.5 14 4.0 15 4.5 16 5.0 17 5.5 18 6.0 19 6.5 20 7.0 21 7.5 22 8.0 23 8.5 24 9.0 25 9.5 26 10.0 27 2 vo NN

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