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Question 1 : A coupon bond that pays interest of 4% annually has a par value of $1,000, matures in 5 years, and is selling

Question 1: A coupon bond that pays interest of 4% annually has a par value of $1,000, matures in 5 years, and is selling today at $85. The actual yield to maturity on this bond is _________.

(a) 0.2% (b) 9.6% (c) 9.1% or (d) 8.8%

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