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On February 20, 2015, Koala, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $55.
On February 20, 2015, Koala, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $55. Initially, the bond was sold for the premium price of $1,025. On February 20, 2020, this bond was selling for only $955. 1. What was the nominal yield on this bond on February 20, 2015? 2. What was the current yield on this bond on February 20, 2015? 3. What is the nominal yield on this bond on February 20, 2020? 4. What is the current yield on this bond on February 20, 2020? 5. What is the yield to maturity for this bond on February 20, 2020? [For #5, use a financial calculator, or excel, or web calculator or trial and error.]
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