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4. Consider a semi-annual bond with an annual coupon = 3.0%, maturity = 5 years, par value = $1,000, and a market price today =

4. Consider a semi-annual bond with an annual coupon = 3.0%, maturity = 5 years, par value = $1,000, and a market price today = $700: a. What is its yield to maturity (YTM)? b. Suppose the bond can be called at $900 at the end of year 3, what is its yield to call?

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A B a b Coupon Par YTM Start 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

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