Find the yields and the durations of the two bonds

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Reference no: EM131459949

You are looking at two bonds today. One is a $1000 face value discount bond maturing in one year that sells for $850. The other is a two-year bond with the same $1000 face value selling at par but with the coupon rate of 8%. Showing the time lines of all the payments of these bonds, find

a. the yields and

b. the durations of the two bonds.

Reference no: EM131459949

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