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1. If the interest rate is 5%, what is the present value of a security that pays you $1, 050 next year and $1,102.50 two years from now? If this security sold for $2200, is the yield to maturity greater or less than 5%? Why?

2. Meacham Enterprises' bonds currently sell for $1,090 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call (YTC)?

a. 12.14%

b. 12.47%

c. 11.81%

d. 12.80%

e. 11.48%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92670256

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