Question
You own a 8% bond maturing in two years and priced at 90%. Suppose that there is a 9% chance that at maturity the bond
You own a 8% bond maturing in two years and priced at 90%. Suppose that there is a 9% chance that at maturity the bond will default and you will receive only 43% of all promised payments. Assume annual coupons.
*Do not round intermediate calculations. Round your answer to 2 decimel places*
What is the bond's promised yield to maturity?
What is its expected yield?
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Analysis Of Financial Data
Authors: Gary Koop
1st Edition
0470013214, 978-0470013212
