What is the yield to maturity on nine-year

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For the following, assume the normal case that bond coupons are semi-annual: ?

a) What is the yield to maturity (YTM) on a 9-year, 6.8% coupon bond if the bond is currently selling for $1,000. (Assume semi-annual coupons) %

b) What is the YTM on the above bond if the value today is $961.08 %

c) For the bond in a) above, what is your realized (actual) EAR if immediately after you purchase the bond market rates, and the rate at which you can reinvest coupons, change to 4.2% and you hold the bond for 5 years and then sell? (remember, coupons and compounding are semi-annual) %

Reference no: EM132061628

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