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You have the information about the bonds below with the various terms and features associated with these bonds, such as yield to maturity, call provisions,

You have the information about the bonds below with the various terms and features associated with these bonds, such as yield to maturity, call provisions, convertibility, duration, convexity and the like.

Issuer

Face Value

Coupon Rate

Rating

Quoted Price

Years until Maturity

Sinking Fund

Call Period

Transatlantic

$1,000

8%

AAA

$1,020

10

Yes

3 Years

Medlife

$1,000

6%

AAA

$1,000

10

No

5 Years

XYZ Company

$1,000

5%

AA

$940

10

Yes

5 Years

XYZ Company

$1,000

0%

AA

$820

15

Yes

NA

  1. Please mention the type of each bond (premium, discount, par, zero coupon bonds?)
  2. Please calculate the nominal and effective yield to maturity of each bonds assuming that the bonds pay the coupons semiannually.
  3. Please assume that you buy these bonds, reinvest any coupons received at the rate of 4% per year, and hold them until mature, what will be your realized return for each bond?
  4. What is a call period?

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