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As a financial analyst at JP Investments, you are trying to determine how bond default affects the yield to maturity. You are analyzing a 7%
As a financial analyst at JP Investments, you are trying to determine how bond default affects the yield to maturity. You are analyzing a 7% coupon bond maturing in three years and priced at 85%. Suppose that there is a 20% chance that at maturity the bond will default and you will receive only $300 payment. What is the bonds promised yield to maturity ? What is the bonds expected yield to maturity
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