The coupon bonds YTM is 5%, because $1,000 + $50 1.05 + $50 1.052 + $50 1.053
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The coupon bond’s YTM is 5%, because −$1,000 + $50 1.05
+ $50 1.052
+ $50 1.053
+ $50 1.054
+ $1, 050 1.055
= 0. The YTM of such a bond (annual coupons) is equal to the coupon rate when a bond is selling for its face value.
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