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Calculate the yield to maturity for bond

    Assignment Instructions

    Assignment ID: FG132444663

    Problem: Consider a corporate bond with 18 years to maturity, $1,000 par value, paying a coupon rate of 8% and currently selling for $1151 in the secondary market. The bond may be “called two years from today at a price of $1,040.
    Required:
    A. Calculate the yield to maturity (YTM) for this bond?
    B. Is it selling at a discount, at a premium, or at par?
    C. Calculate the yield to call (YTC)? D. If you purchased this bond, explain which you expect to receive, YTM or YTC?

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