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CALCULATING AND INTERPRETING CURRENT YIELD AND YIELD TO MATURITY: Question: Describe and differentiate between a bond's , current yield , and yield to maturity .

CALCULATING AND INTERPRETING CURRENT YIELD AND YIELD TO MATURITY:

Question:

Describe and differentiate between a bond's, current yield, and yield to maturity. Why are these yield measures important to the bond investor?

Find the yield to maturity of a 20-year, 9%, $1,000 par value bond trading at a price of $850. What's the current yield on this bond?

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