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HW2_Ans - the bond with the highest return which bond would...

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NAME: ________________________________ EC370 – Fall 2008 HW2 Answer KEY Write your answers to the multiple choice questions in the appropriate space using CAPITAL LETTERS. 1) D 9) A 17) D 2) B 10) B 18) A 3) B 11) A 19) B 4) C 12) D 20) B 5) C 13) D 21) C 6) C 14) C 22) B 7) C 15) D 23) A 8) A 16) C 24) D 25) Assume bonds A and B are identical in terms of risk and you are trying to determine which bond to purchase. If you hold until maturity and are only interested in purchasing
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Unformatted text preview: the bond with the highest return, which bond would you rather buy? You would rather buy the bond with the lower (8%) coupon – Bond A 26) Report your findings for the yield to maturity for each bond (in percentage terms): YTM Bond A: 13.797% YTM Bond B: 7.108% 27) Are the results from the IRR function the same as those using the Goal Seek method? YES....
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