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QUESTION 1: PART (a) 10-year bond with 12.5% coupon rate and $1000 face value yield to maturity is 14.5%.Assuming annual coupon payment, calculate the price

QUESTION 1:

PART (a)

10-year bond with 12.5% coupon rate and $1000 face value yield to maturity is 14.5%.Assuming annual coupon payment, calculate the price of the bond.

PART (b)

A ten -year bond has an 10% coupon rate and a face value of $1000. If the current price of the bond is $1150, calculate the yield to maturity of the bond (assuming annual interest payments).

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