Question
Expected yield- You own a 6% bond maturing in two years and priced at 88%. Suppose that there is a 9% chance that at maturity
Expected yield-
You own a 6% bond maturing in two years and priced at 88%. Suppose that there is a 9% chance that at maturity the bond will default and you will receive only 41% of the promised payment.
What is the bond's promised yield to maturity?
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Options Futures and Other Derivatives
Authors: John C. Hull
10th edition
013447208X, 978-0134472089
