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5) Suppose that we are looking at a 3-year bond which pays 5 percent annual coupon and its principal is $100 is trading at $96.

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5) Suppose that we are looking at a 3-year bond which pays 5 percent annual coupon and its principal is $100 is trading at $96. Remember that the yield of the bond is defined as the r that satisfies: 5 5 105 (1+r) *(1+r)2 + (1+r)3 1. Computer using binary search. 2. Repeat by using Newton

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