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Sharkeesha prefers to purchase bonds that contain a sinking fund provision to protect her from any potential loss of her invested capital. She purchased a
Sharkeesha prefers to purchase bonds that contain a sinking fund provision to protect her from any potential loss of her invested capital. She purchased a 20-year, $20,000 sinking fund bond with a 12% coupon for $18,900. If the company calls the bond after 10 years, and the call penalty requires a payment of $30 per $1,000 of face value, what are the yield-to-maturity and yield-to-call on this bond?
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