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It is now January 1, 2010, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has

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It is now January 1, 2010, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has a 9.5% annual coupon and had a 20-year original maturity ( matures on December 31, 2005.) There is 5 years of all protection (until December 31, 2020). after which time it can be called at 109 that is at 109% of par or $1.09. Interest rates have declined since it was issued, and it is now selling at 116.545% of pars or $1.165.45. What is the yield te maturity? Do not round intermediate calculations. Round your answer to two decimal places. What is the yield to call? Do not round Intermediate calculations, Round your answer to two decimal places. hf you bought this bond, which return would you actually earn Select the correct option 1. Investors would not expect the bonds to be called and to earn the VTM because the VTM is less than the VTC. 11. Investors would expect the bonds to be called and to earn the VIC because the VTC is less than the VTM III. Investors would expect the bonds to be called and to earn the VTC because the VTM less than the VTC. IV. Investors would expect the bonds to be called and to earn the VTC because the VTC greater than the VTM V. Investors would not expect the bonds to be called and to earn the VTM because the VTM greater than the VTC. c. Suppose the band had been selling at a discount rather than premium. Would the viele te maturity have been the most likely return or would the Vield to call have been most likely 1. Investors would expect the bonds to be called and to eam the VTC because the VTC oss than the VTM 11. Investors would not expect the bonds to be called and to car the VTM DC the VTM greater than the VTC TH! There would not expect the bords to be called ard to the VTM because the less than the VTC IV. THverters would expect the bonds to be called and team the VTC batute the VTM less than the TC V. Investors would expect the bonds to be called and to eam the VTC but the greater than the VTM

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