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Question 2A firm issues a bond today with a $1,000 face value, an 8% coupon interest rate, and a 25-year maturity. An investor purchases the

Question 2A firm issues a bond today with a $1,000 face value, an 8% coupon interest rate, and a 25-year maturity. An investor purchases the bond for $1,000.

(2.1) What is the yield to maturity (YTM)? Explain.

(2.2) Suppose the investor bought the bond described previously for $900. What is the YTM?

(2.3) Suppose the bond described previously has a price of $1,100 five years after it is issued. What is the YTM at that time?

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