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Chapter 4, Problem 19AP
To determine

The $1000 bond which has the higher yield to maturity, a 20-year bond selling for $800 with a current yield of 15% or a 1-year bond selling for $800 with a current yield of 5%

Concept Introduction:

Yield to Maturity - It is the total receipt anticipated on a bond if it is held till maturity. PV=FV/(1+i)n

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