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Problem 9: You are interested in buying a bond that has a coupon rate of 9%, and matures in 25 years. The market rate for

Problem 9: You are interested in buying a bond that has a coupon rate of 9%, and matures in 25 years. The market rate for bonds with similar risk is 11.5%. What is the most you should pay for this bond? Problem 10: Gwenyth just purchased a bond for $1250 that has a maturity of 10 years and a coupon interest rate of 8.5%, paid annually. What is the YTM of the $1000 face value bond that she purchased?
NPER 25 NPER 10
RATE (Coupon) 9.00% RATE (Coupon) 8.50%
PV (Coupon Price) 1,000 PV (Coupon Price) 1,000
PMT 90 PMT 85
RATE (Market Rate) 12% RATE (Market Rate) ?
PV (Market Price) ? PV (Market Price) 1,250
FV 1,000 FV 1,000
Compounding Periods Compounding Periods 1
Compute ? $1,000.00 Compute ? 5.23%

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