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It is now January 1,2021 , and you are considering the purchase of an outstanding bond that was issued on January 1 , 2019. It
It is now January 1,2021 , and you are considering the purchase of an outstanding bond that was issued on January 1 , 2019. It has a 9% annual coupon and had a 20-year original maturity. (It matures on December 31, 2038.) There is 5 years of call protection (until December 31, 2023), after which time it can be called at 108 that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 114.12% of par, or $1,141.20. a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. 2% What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. 03%
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