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Bond Valuation

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A $1,000 par value bond sells for $1,216. It matures in 20 years, has a 14 percent coupon, pays interest semiannually, and can be called in 5 years at a price of $1,100. What is the bond's YTM and YTC?

YTM YTC
a. 6.05%; 9.00%
b. 10.00%; 10.26%
c. 10.06%; 12.00%
d. 11.26%; 14.00%
e. 11.26%; 10.00%

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Solution Preview

We can calculate the YTM and the YTC using the RATE function in excel. In YTC we ...

Solution Summary

The solution explains how to calculate the bond's YTC and YTM

$2.19
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