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Cutler Co. issued 11-year bonds a year ago at a coupon rate of 7.8 percent. The bonds make semiannual payments. 1. If the YTM on

Cutler Co. issued 11-year bonds a year ago at a coupon rate of 7.8 percent. The bonds make semiannual payments.

1. If the YTM on these bonds is 8.0 percent, what is the current bond price?

2.What rate of return will the investor earn if the bond price in one year is $1,070?

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