Calculate the promised yield and the expected yield on bond

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A corporate bond has two-year maturity. The bond pays coupons semi-annually. The coupon rate is 6% and the principal is $1,000. The bond has a 10% probability of default at maturity. The payment under default is only 60% of the promised amount. An investor buys the bond for $890.19. Calculate the promised yield and the expected yield on the bond.

Reference no: EM132057606

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