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Q2) Related to Unit 5 [16 marks] Bond with a par value of $1,000 sell for $960, mature in five years and have a 7%

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Q2) Related to Unit 5 [16 marks] Bond with a par value of $1,000 sell for $960, mature in five years and have a 7% annual coupon rate paid semiannually. (a) Calculate 'Current yield'. (b) Calculate 'Yield to maturity'. (c) State one major limitation/assumption for calculating Current yield' and 'Yield to maturity'. [8]

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