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Q#3: [10 Points] Assume that an investor is looking at two bonds. Bond A is a 20-year, 9% (semiannual pay) bond that is priced to
Q\#3: [10 Points] Assume that an investor is looking at two bonds. Bond A is a 20-year, 9% (semiannual pay) bond that is priced to yield 10.5%. Bond B is a 20 -year, 8% (annual pay) bond that is priced to yield 7.5\%. Both bonds carry 5-year call deferments and call prices (in five years) of $1,050. a. Which bond has the higher current yield? b. Which bond has the higher YTM? c. Which bond has the higher YTC
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