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A corporate bond has four years remaining to maturity, has a 10 percent yield to maturity, and is priced at $89.20 per $100 of par
- A corporate bond has four years remaining to maturity, has a 10 percent yield to maturity, and is priced at $89.20 per $100 of par value.
- If the bond has annual payments, what is the bonds coupon rate?
- If the bond has semi-annual payments, what is the bonds coupon rate?
- A rich uncle is giving Joe, as a gift, one of the two bonds: (i) bond with annual payments or (ii) bond with semi-annual payments. Which bond should Joe select or are both bonds worth the same amount? Explain your answer.
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