Consider a 20-year $1000 bond that was issued 5-years ago. If the bond has an annual coupon
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Question:
Consider a 20-year $1000 bond that was issued 5-years ago. If the bond has an annual coupon rate of 7%, pays coupon annually, and is currently selling for $900. Estimate if the yield to maturity is more likely to be 8.16%, 6.16% or 5.15%. Explain why.
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