1 an investor purchased the 4 bonds listed below each of, Ask an Expert

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1. An investor purchased the 4 bonds listed below. Each of them had a 9 percent yield to maturity at the time of purchase. Which one would experience the greatest percentage price change if the YTM on each bond fell to 8 percent?

a. 10-year, zero-coupon bond

b. 5-year, zero-coupon bond

c. 30-year, zero-coupon bond

d. 10-year, 10% annual coupon bond

2. A firm’s bonds have a maturity of 12 years with a $1,000 face value, a 10 percent semiannual coupon, are callable in 5 years at $1,095, and currently sell at a price of $1,197. What is their yield to maturity (YTM)?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92710331

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