Problemtoday is january 1 2012 and you are considering, Ask an Expert

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Problem:

Today is January 1, 2012 and you are considering purchasing an outstanding bond that was issued on January 1, 2010. It has a 9% annual coupon and originally had a 20-year maturity.The bonds can be called for 5 years from original issue date at a premium of $1085. Interest rates have declined and the bonds are currently selling for 112% of par.

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Question: Calculate the YTM and the YTC.

Note: Please provide reasons to support your answer.

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Category:- Basic Finance
Reference No.:- M91148523

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