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Ch 7 Problem

Ch 7 Problem - 70/0 • What is the current yield on the...

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Comprehensive Problem What is the price of a $1,000 par value bond with a 60/0 coupon rate paid semiannually, if the bond is priced to yield 5% and it has 9 years to maturity? What would be the price of the bond if the yield rose to
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Unformatted text preview: 70/0. • What is the current yield on the bond if the YTM is 7 % ? 7-48 5% YTM: 18 N; 2.5 I1Y; 30 PMT; 1,000 FV; CPT PV = 1,071.77 7% YTM: 18 N; 3.5 I1Y; 30 PMT; 1,000 FV; CPT PV = 934.05 Current yield = 60/934.05 = 6.42% 6.48...
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