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7. Check My Work (a remaining) 8. 9. 10. ebook . It is now January 1, 2021, and you are considering the purchase of an

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7. Check My Work (a remaining) 8. 9. 10. ebook . It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 9.5% o annual coupon and had a 30-year original maturity. (It matures on December 31, 2048.) There is 5 years of Cal protection (until December 31, 2023), after which time it can be called at 108-that is, at 100% of pac or $1,080, Interest rates have declined since it was issued, and it is now selling at 120,08% of par, or $1,200.80. a. What is the yield to maturity? Do not round interntiediate calculations. Round your answer to two decimal places 11. 12. What is the yield to call? Do not round Intermediate calculations, Round your answer to two decimal plane b. If you bought this bond, which return would you actually earn? 1. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM II. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM m. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. -Select- c. Suppose the bond had been selling at a discount rather than a premium. Would the yield to maturity have been the most likely return, or would the yield to call have been most likely? 1. Investors would expect the bonds to be called and to earn the YTC because the YTC a less than the YTM II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. TIL Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. TV. Investors would expect the bonds to be called and to earn the YTC because the YTCH greater than the YTM Select

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