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Yield to maturity current yield capital gain, yield to call

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A 10 year, 12% semiannual coupon bond, with a par value of $1000, may be called in 4 years at a call price of $1060. The bond sells for $1100. (Assume that the bond has just been issued.)

a) What is the bonds yield to maturity?
b) What is the bonds current yield?
c) What is the bonds capital gain or loss yield?
d) What is the bond's yield to call?

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Solution Summary

Explains how to calculate yield to maturity, current yield, capital gain yield and yield to call for a bond. The problem is solved using Excel for easy understanding.

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A 10 year, 12% semiannual coupon bond, with a par value of $1000, may be called in 4 years at a call price of $1060. The bond sells for $1100. (Assume that the bond has just been issued.)

Part A:
Period Cash ...

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