Computation of current yield and ytm and bond price

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Computation of current yield and YTM and bond price

Current Yield and yield to maturity. A bond has a $1,000 par value, 10 years to maturity, a 7 percent annual coupon, and sells for $985.

a. What is its current yield

b. What is its yield to maturity (YTM).

c. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today?

Reference no: EM1314412

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