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Business, 08.07.2020 23:01 martinjohnsond079

Harold Reese must choose between two bonds:. Bond A pays $102 annual interest and has a market value of $890. It has 10 years to maturity.
Bond B pays $88 annual interest and has a market value of $800. It has five years to maturity.
Assume the par value of the bonds is $1,000.
A. Compute the current yield on both bondsBond A 0.1089 or 10.89Bond B 0.1062 or 10.62C. A drawback of current yield is that it does not consider the total life of the bond. For example, the approximate yield to maturity on Bond X is 11.90 percent. What is the approximate yield to maturity on Bond Z? The exact yield to maturity?Approximate yield to maturity 16.19 ()(How do you get the Exact yield to maturity) for this problem?

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