Yield to Maturity
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Which bond will have a higher yield to maturity, a $1,000 face value bond, with a 5.0% coupon rate that sells for $900; or a $1000 face value bond, with a $50 annual coupon that sells for $1,050. Explain your choice.
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Solution Summary
Yield to Maturity is chosen in the following posting.
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For the first bond
FV = 1000
annual payment = 5% * 1000 = 50
PV = -900
assuming they are both three-year bond
N = 3
by a financial ...
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