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Currently, a callable bond is selling for $1,145. It pays a 8% semi-annual coupon, has a 14-year maturity, and a $1,000 par value, but

Currently, a callable bond is selling for $1,145. It pays a 8% semi-annual coupon, has a 14-year maturity, and a $1,000 par value, but it can be called in 5 years at $1.050. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Part a. What is the yield to maturity for this bond? Part b. What is the yield to call for this bond?

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