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Aziz works for a broker. One of his clients is offered a bond at $ 1 , 0 5 0 . It is a 1
Aziz works for a broker. One of his clients is offered a bond at $ It is a year bond with a par value of $ and a call price of $The bonds first call date is in five years. Coupon payments are made semiannually.
a Find the current yield, YTM and YTC on this issue. Which of these three yields is the highest? Which is the lowest?
b Assume that the price of the bond declines to $ Now which yield is the highest? Which is the lowest?
An investor wants to find the duration of a year, semiannualpay, noncallable bond thats currently priced in the market at $ to yield Using a basis point change in yield, find the effective duration of this bond. Hint: Use Equation from Ch
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