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9-year, 4% semi-annual coupon bond with $1,000 face value is currently trading at $961. Which of the following formulas could be used to compute this
9-year, 4% semi-annual coupon bond with $1,000 face value is currently trading at $961. Which of the following formulas could be used to compute this bond's yield to maturity?
a. $1,000 = $20 1 YTM/2 1 (YTM/2)*(1 + YTM/2)18 + $961 (1 + YTM/2)18 1 b. $961 = $200 1 (YTM/2)*(1 + YTM/2) YTM/2 $1,000 (1 + YTM/2) C. $961 = $20 1 1 YTM/2*(1 + YTM/2)18 (YTM/2) $1,000 (1 + YTM/2)18 d. $961 = $40 YTM YTM*(1 + YTM) 1 31+ (TM/2) + 1+ | (YTM/2)*(1 + YTM/2)18 $1,000 (1 + YTM e. $961 = $40 1 1 YTM/2 (YTM/2)*(1 + YTM/2)18 + $1,000 (1 + YTM/2)18 f. $961 = $20 1 YTM/2 $1,000 (1 + YTM/2)18Step by Step Solution
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