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Calculation and Interpretation of traditional yield measures for fixed-rate bonds. Their assumptions and limitations. 1. Consider a 20-year, $1,000 par value, 6% semiannual-pay bond that
Calculation and Interpretation of traditional yield measures for fixed-rate bonds. Their assumptions and limitations. 1. Consider a 20-year, $1,000 par value, 6% semiannual-pay bond that is currently trading at $802.07. Calculate the current yield, the YTM, and the BEY 2. A bond with 5 years remaining until maturity is currently trading for 101 per 100 of par value. The bond offers a 6% coupon rate with interest paid semiannually. The bond is first callable in 3 years, and is callable after the date on coupon dates according to the following schedule: End of year Call Price 102 101 100 a. What is the bond's yield to maturity? b. What is the bond's yield-to-first call? c. What is the bond's yield-to-second call? d. What is the bond's yield-to-worst
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