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**Please answer question #2, Question #1 is included for information purposes.** 1. During 2018, the market rates changes dramatically. Now Spahr Cosmetics bonds are sold

**Please answer question #2, Question #1 is included for information purposes.**

1. During 2018, the market rates changes dramatically. Now Spahr Cosmetics bonds are sold for $1,204. What is yield to maturity assuming that the bond has 12 years to maturity, a par value of $1,000, and a coupon rate of 5%? The bond pays coupon interest semiannually.

  1. 4.59%
  2. 6.46%
  3. 2.97%
  4. 2.59%

  1. What is the effective annual yield on the bond in question #6?
  1. 2.61%
  2. 2.99%
  3. 4.63%
  4. 6.50%

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