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Business, 15.10.2019 00:20 josephvcarter

It is now january 1, 2019, and you are considering the purchase of an outstanding bond that was issued on january 1, 2017. it has a 9.5% annual coupon and had a 20-year original maturity. (it matures on december 31, 2036.) there is 5 years of call protection (until december 31, 2021), after which time it can be called at 108—that is, at 108% of par, or $1,080. interest rates have declined since it was issued, and it is now selling at 120.08% of par, or $1,200.80. a. what is the yield to maturity? do not round intermediate calculations. round your answer to two decimal places. % what is the yield to call? do not round intermediate calculations. round your answer to two decimal places. b. if you bought this bond, which return would you actually earn?

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