Question: 1. You are considering purchasing a General Electric bond that has a coupon rate of 6%, a par value of $1,000, and a maturity of

1. You are considering purchasing a General Electric bond that has a coupon rate of 6%, a par value of $1,000, and a maturity of 25 years. The bond is callable in 10 years and if the bond is called you will be paid a premium of $100 over par. The yield to maturity on comparable bonds is 9%. Calculate the current price of the bond, the current yield of the bond, and the yield to call of the bond.

2. You are considering purchasing a bond with a coupon rate of 5%, a par value of $1000, and a maturity of 2 years. The yield to maturity on comparable bonds is 3%. Calculate the price of the bond, the current yield of the bond, and the duration of the bond.

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