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A corporate bond with a 4.0 percent coupon has 10 years left to maturity. It has had a credit rating of BBB and a yield

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A corporate bond with a 4.0 percent coupon has 10 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 6 percent. The firm has recently invested in a very profitable new project and the rating agency is upgrading the bonds to A. The new appropriate discount rate will be 5 percent. What will be the change in the bond's price in dollars? Assume interest payments are paid annually and par value is $1,000. Hint: Estimate the first price, estimate the second price, and take the difference. $69.98 $65.22 $70.34 $67.85 A 5.0 percent coupon bond with 25 years left to maturity can be called in five years. The call premium is one year of coupon payments. It is offered for sale at $1,066. What is the yield to call of the bond? (Assume that interest payments are paid annually and par value is $1,000.) 4.42 percent 4.63 percent 4.02 percent 4.82 percent

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