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Question one: Red Frog company has two bonds: Bond A has current market price of $ 7 8 0 , the bond pays 3 %

Question one:

Red Frog company has two bonds:

Bond A has current market price of $

780,

the bond pays

3 %

coupon and mature in

3

years.

Bond

B,

has current market price of $

1100

and the bond pays

13 %

coupon forever.

What is yield to maturity

(

YTM

)

for both bond A and

B ?

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