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There are two straight yen Eurobonds with the same maturity of five years. Bond A has a coupon of 12% and Bond B, a coupon
There are two straight yen Eurobonds with the same maturity of five years. Bond A has a coupon of 12% and Bond B, a coupon of 8%. The current market yield on yen bonds is 10%. These two bonds have the same yield-to-maturity of 10% and are correctly priced at 107.58% for Bond A and 92.42% for Bond B. Calculate the yield-to-maturity indicated by the simple yield calculation. Critically discuss the potential biases of the simple yield calculation
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