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    Yield to Maturity and Purchasing

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    I am confused about purchasing a 10% bond and my broker keeps saying it has a 9% yield to maturity. Can you explain this for me?

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    Solution Preview

    10% bond means that the coupon rate on the bond is 10%. Therefore, if the face value of the bond is $1000, you will receive $100 per annum as coupon interest payment. The yield to maturity means the average rate of return you ...

    Solution Summary

    The solution discusses yield and maturity and 10% bonds.