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can you solve it and explain 6.1 (A) Key Components of a Bond Figure 6.1 Merrill Lynch corporate bond. - Par value: Typically $1000 -
can you solve it and explain
6.1 (A) Key Components of a Bond Figure 6.1 Merrill Lynch corporate bond. - Par value: Typically $1000 - Coupon rate: Annual rate of interest paid. - Coupon: Regular interest payment received by holder per year. - Maturity date: Expiration date of bond when par value is paid back. - Yield to maturity: Expected rate of return based on price of bond 6.1 (A) Key Components of a Bond Example 1: Key components of a corporate bond Let's say you see the following price quote for a corporate bond: Issue Price Coupon(\%) Maturity YTM\% Current Yld. Rating Price =91.5% of $1000$915; Annual coupon =6.35%1000$63.50 Maturity date = June 15,2010 ; If bought and held to maturity Yield =15.438% Current Yield =$ Coupon/Price =$63.5$9156.94% ) IFCR>VTMVrP0>FV preminuin 2) If CRStep by Step Solution
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