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(financial mathematics) PQR Insurance Company purchases a corporate bond with a par value of 100,000,000 and coupon rate of 7% which will mature at par
(financial mathematics) PQR Insurance Company purchases a corporate bond with a par value of 100,000,000 and coupon rate of 7% which will mature at par value in due 5 years. The bonds were purchased at a premium of 105,000,000. Suppose the firm earns an effective yield of Z% of the purchase price on each coupons which are then accumulated into the Sinking Fund at an interest rate effective 5% in order to replace the premium paid to purchase the bonds. What is the Z value? please help, asap, i will definitely upvote, thank u
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