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Mr. Clark is considering another bond, Bond D. It has a 8% semiannual coupon and a $1000 face value (i.e., it pays 40$ coupon every
Mr. Clark is considering another bond, Bond D. It has a 8% semiannual coupon and a $1000 face value (i.e., it pays 40$ coupon every 6 months). Bond D is schedualed to mature in 9 years and has a price of $1150. It is also callable in 5 years with a call price of $1040. 1. What is the bonds nominal yield to maturity? 2. What is the bonds nomianl yield to call? 3. If Mr. Clark were to purchase this bond, would he be more liely to recieve the yield to maturity or yield to call? explain you answer.
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