Question: An investor is considering purchasing a bond with a 5.5 percent coupon interest rate, a par value of $1,000, and a market price of $927.50.

An investor is considering purchasing a bond with a 5.5 percent coupon interest rate, a par value of $1,000, and a market price of $927.50. The bond will mature in 9 years. Based on this information, answer the following questions:
a. What is the bond's current yield?
b. What is the bond's approximate yield to maturity?
c. What is the bond's yield to maturity using a financial calculator?

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a The current yield of the bond is 593 b The approximate yield to matur... View full answer

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