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A 5.75 percent coupon municipal bond has 20 years left to maturity and has a price quote of 96.95. The bond can be called in
A 5.75 percent coupon municipal bond has 20 years left to maturity and has a price quote of 96.95. The bond can be called in 10 years. The call premium is one year of coupon payments.
Compute the bond's current yield, yield to maturity, taxable equivalent yield (for an investor in the 30 percent marginal tax bracket), and yield to call. (Assume interest payments are paid semi annually and a par value of $5,000.)
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