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A corporate bond pays interest annually and has 3 years to maturity, a face value of $1,000 and a coupon rate of 3.7%. The bond's current price is $997.21. It is callable at a call price of $1,050 in one year.   What is the bond's yield to maturity? What is the bond's yield to call?

A corporate bond pays interest annually and has 3 years to maturity, a face value of $1,000 and a coupon rate of 3.7%. The bond's current price is $997.21. It is callable at a call price of $1,050 in one year.   What is the bond's yield to maturity? What is the bond's yield to call?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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A corporate bond pays interest annually and has 3 years to maturity, a face value of $1,000 and a coupon rate of 3.7%. The bond's current price is $997.21. It is callable at a call price of $1,050 in one year.

 

What is the bond's yield to maturity?

What is the bond's yield to call?

 

 

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