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Suppose a ten-year, $1,000 bond with an 8% coupon rate and semi-annual payments is trading for a price of $1,034.74. Which of the following is
Suppose a ten-year, $1,000 bond with an 8% coupon rate and semi-annual payments is trading for a price of $1,034.74. Which of the following is the correct formula that you would use to find the yield to maturity (YTM) of this particular bond?
A. Bond value = + u tom Par (1 + r)" (1 + r)" OB. 40 1- + 1,000 (1 + r)20 (1 + r) 20 Oc. 40 1,000 + $1,034.74 = 49 ( 20 OD. 80 1 (1 + r)20 1,000 (1 + p)20 + $1,034.74 = 1- r (1 + r) 20 E. 80 + $1,034.74 = 1,000 (1+1) 10 r (1+010 OF. All of these answers are equally good for finding the yield, r, in this specific case for this bond Step by Step Solution
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