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MSFT has a bond outstanding with a current price of $1,114.60, a coupon rate of 3% that is paid annually, and eight years until maturity.

MSFT has a bond outstanding with a current price of $1,114.60, a coupon rate of 3% that is paid annually, and eight years until maturity. Calculate the promised YTM if the expected reinvestment rate generated on cash flows is only 1% annually.

a) 1.47%

b) 1.43%

c) 4%

d) 3%

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