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An annual bond has a price of $855. It has 9 years to mature and the coupon rate is 12%. 1) What is the YTM?
An annual bond has a price of $855. It has 9 years to mature and the coupon rate is 12%.
1) What is the YTM? Approximate formula ok if you wish. Otherwise, you can use financial calculator or the RATE function in Excel.
2) Algebraically confirm your answer for previous question using the appropriate bond pricing formula to calculate the price given your answer for YTM.
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