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John owns investment A and 1 bond B . The total value of his holdings is $ 6 , 2 1 9 . 2 4

John owns investment A and 1 bond B. The total value of his holdings is $6,219.24. Investment A is expected to pay annual cash flows to John of $408.00 per year forever with the first annual cash flow expected in 1 year from today. Investment A has anexpected return of 8.13 percent. Bond B pays semi-annual coupons, matures in 12 years, has a face value of $1,000.00, has a coupon rate of 8.80 percent, and pays its next coupon in 6 months. What is the yield-to-maturity for bond B?
6.38%(plus or minus 2 bps)
7.04%(plus or minus 2bps)
2.45%(plus or minus 2bps)
3.32%(plus or minus 2bps)
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