Yield to maturity on a 7-year bond

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Bond X is noncallable, has 10 years to maturity, a 5% annual coupon, and a $1,000 par value. Your required return on Bond X is 8%, and if you buy it, you plan to hold it for 3 years. You, and the market, have expectations that in 3 years the yield to maturity on a 7-year bond with similar risk will be 10%. How much should you be willing to pay for Bond X today?

Reference no: EM133119148

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