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Find the yield rates

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Question - An investor purchases two bonds with following properties.

Bond 1: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 8.3% annual and was purchased for $1058.98.

Bond2: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 5.7% annual and was purchased for $892.29.

If both bonds mature in the same number of years and the investor yields the same rate on both bonds, find the yield rates?

Reference no: EM132806925

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