F08xxx final 171a

F08xxx final 171a - Version A Name(please print_AMR...

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1. You buy a bond for \$950. The bond pays interest of \$100 at the end of year 1, at which time you sell it for \$980. The rate of return you expect to earn on this investment is approximately (a) 8.00% (b) 10.53% (c) 10.20% (d) 13.68% 2. Consider two bonds A and B. Both have the same YTM and the same maturity. But A pays a coupon rate of 12% while B pays a coupon rate of 8%. (a) Without knowing the exact YTM we cannot determine the bonds’ durations
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This note was uploaded on 09/08/2010 for the course BUS 171A at San Jose State.

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F08xxx final 171a - Version A Name(please print_AMR...

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