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Assume that the Financial Management Corporation's $1 comma 0001,000-par-value bond has a 5.900 %5.900% coupon, matures on May 15, 2023, has a current price quote
Assume that the Financial Management Corporation's
$1 comma 0001,000-par-value
bond has a
5.900 %5.900%
coupon, matures on May 15, 2023, has a current price quote of
106.024106.024
and a yield to maturity(YTM) of
4.433 %4.433%.
Given this information, answer the following questions:
a.What is the dollar price of the bond?
b.What is the bond's current
yield?
c.Is the bond selling at par, at a discount, or at a premium? Why?
d.Compare the bond's current yield calculated in part b to its YTM and explain why they differ.
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