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Today is January 1, 2012, and you are considering the purchase of an outstanding bond that was issued on January 1, 2010. It has a
Today is January 1, 2012, and you are considering the purchase of an outstanding bond that was issued on January 1, 2010. It has a 9% annual coupon and had a 20-year original maturity. The bonds can be called for 5 years from original issue date at a premium of $1085. Interest rates have declined and the bonds are currently selling for 112% of par. Calculate the YTM and the YTC.
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