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# Solving for Bond Pricing

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1. A 6-year Circular File bond pays interest of \$80 annually and sells for \$950. What is its coupon rate, current yield, and yield to maturity?

2. Bond Pricing - If Circular File wants to issue a new 6-year bond at face value, what coupon rate must the bond offer?

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#### Solution Preview

1. When the bond was issued, the Price = \$1000 = FV
- then coupon rate = coupon / Face value = 80 / 1000 = 8%
- current yield = coupon / price ...

#### Solution Summary

This solution provides a step by step response illustrating how to conduct the calculations required for each of these two questions inquiring about a circular file bond. All calculations and formulas are included in this 115 word response.

\$2.49