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A bond has 5 years to maturity, a coupon rate of 1 0 % , and a par value of $ 1 , 0 0

A bond has 5 years to maturity, a coupon rate of 10%, and a par value of $1,000, and the market rate for similar bonds is 12%(yield to maturity =12%). Assume annual compounding. a. What is the current price of the bond? b. What is the current yield? c. What is capital gain? d. What will be the price of the bond when it has 4 years to maturity? e. What is the percentage increase in price during the first year? Is it the same as you found in part c?

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