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If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm
If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4-year 5.0 percent coupon bond with annual coupon payments and a face value of $1,000. a. Assume the yield to maturity is 4.0 percent. b. Assume the yield to maturity is 6.0 percent. Complete this question by entering your answers in the tabs below. Assume the yield to maturity is 4.0 percent. (Do not round intermediate calculations. Enter "Bond price" answers to 2 decimal places and "Rate of return" rounded to 1 decimal place.)
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