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Given the following information: XY Inc. 5% bond AB Inc. 14% bond Both bonds are for $1,000, mature in 20 years, and are rated AAA.

image text in transcribed Given the following information: XY Inc. 5% bond AB Inc. 14% bond Both bonds are for $1,000, mature in 20 years, and are rated AAA. a) What should be the current market price of each bond if the interest rate on tripleA bonds is 10 percent? b) Which bond has a current yield that exceeds its yield to maturity? c) Which bond would you expect to be called if interest rates are 10 percent? d) If CD Inc. had a bond outstanding with a 5 percent coupon and a maturity date of 20 years but it was rated BBB, what would you expect its price to be relative to the XY Inc. bond

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