AAA Company's bond has 4 years to maturity, a $1,000 par value, and an annual coupon rate

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AAA Company's bond has 4 years to maturity, a $1,000 par value, and an annual coupon rate of 9%.

a. What is the bond's yield to maturity (YTM) at a current market price of (1) $780 (2) $1,200?

b. Would you be willing to pay $780 for the bond if you thought a "fair" market interest (discount) rate was 11%? Briefly explain your answer.

Related Book For answer-question

Precalculus

ISBN: 978-0321716835

9th edition

Authors: Michael Sullivan

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Posted Date: Mar 12, 2024 04:11 AM

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AAA Company's bond has 4 years to maturity, a $1,000 par value, and an annual coupon rate

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To calculate the yield to maturity YTM of AAA Companys bond at different market prices we can use th... View the full answer

Precalculus

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