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Find the yield rate convertible semiannually

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Reference no: EM132211722

Question - An investor buys two 20-year bonds, each having semiannual coupons and each maturing at par. For each bond the purchase price produces the same yield rate. One bond has a par value of $500 and a coupon of $50. The other bond has a par value of $1,000 and a coupon of $30. The dollar amount of premium on the first bond is twice as great as the dollar amount of discount on the second bond. Find the yield rate convertible semiannually.

Reference no: EM132211722

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