Consider a 12 year, 7% semiannual coupon bond whose current price is 96.09 (as a percentage of par). It can be called in 8 years at price 104.00. Calculate the following. Express your answers as percentages to two decimal places (a) yield to maturity (b) yield to call (c) current yield (d) yield to worst
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The bond has a 12-year maturity and pays semiannual coupons, so it will make 24 coupon payments. Each coupon payment is 7% of the par value, which means it is 0.07 * 100 = 7. The par value of the bond is 100, so each coupon payment is 7% * 100 = 7. The current Show more…
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