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Part THREE Debt Securities 5. Bonds of Zello Corporation with a par value of $1,000 sell for $960, mature in five yeat and have a

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Part THREE Debt Securities 5. Bonds of Zello Corporation with a par value of $1,000 sell for $960, mature in five yeat and have a 7% annual coupon rate paid semiannually. a. Calculate the: (LO 106) (I) Current yield. (2) Yield to maturity. (3) Horizon yield (also called realized compound return) for an investor with a three- year holding period and a reinvestment rate of 6% over the period. At the end of three years the 7% coupon bonds with two years remaining will sell to yield 7%. b. Cite one major shortcoming for each of the following fixed-income yield measuresi (1) Current yield. (2) Yield to maturity. (3) Horizon yield (also called realized compound return

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