Consider coupon bond with face value

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1. Consider a coupon bond with a face value of $1,000 with a 4.25% coupon rate (paid annually) and 14 years to maturity. If the current market price of the bond is $925.76, what is the yield-to-maturity?

2. Stephen plans to purchase a car 2 years from now. The car will cost $59775 at that time. Assume that Stephen can earn 7.27 percent (compounded monthly) on his money. How much should he set aside today for the purchase?

Reference no: EM131879474

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