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Q1: Assume you own a corporate bond that has a face value of $1,000 with nine years to maturity and pays 6.2 percent coupon. The
Q1: Assume you own a corporate bond that has a face value of $1,000 with nine years to maturity and pays 6.2 percent coupon. The bond makes semiannual payments and currently is selling for 105 percent of par.
- What is the current price of the bond?
- What is the yield to maturity (YTM) of this bond?
- What is the current yield on the bond?
- What is the effective annual yield?
** Please note in part B, you should get the same answer by using both manual way and by the financial calculator. Answers with ONLY financial calculations will not be graded.
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