You paid $889 for a corporate bond with 9.2% yield and five years to maturity. the face value of the bond is $1,000. the bond pays coupon interest on quarterly basis. your required rate of return on the bond was 8.9%. compute the bond’s current yield.

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Date 09/01/2022 09/02/2022 09/06/2022 09/07/2022 09/08/2022 09/09/2022 09/12/2022 09/13/2022 09/14/2022 09/15/2022 09/16/2022 6 Mo 1 Mo 2 Mo 3 Mo 2.53 2.80 2.97 3.34 2.49 2.79 2.94 3.33 2.44 2.82 3.04 3.40 2.30 2.80 3.07 3.42 3.60 2.57 2.86 3.06 3.44 3.60 2.57 2.88 3.08 3.52 3.67 2.62 2.93 3.17 3.56 3.70 2.55 2.95 3.28 3.75 3.92 2.54 2.95 3.24 3.76 3.95 2.76 3.03 3.22 3.78 4.00 2.68 3.01 3.20 3.77 3.96 1 Yr 2 Yr 3.51 3 Yr 20 Yr www 3.54 3.39 3.26 3.64 3.37 3.44 3.30 3.20 3.61 3.35 3.55 3.43 3.41 3.33 3.74 3.49 3.42 3.45 3.45 3.50 3.37 3.35 3.27 3.67 3.29 3.69 3.33 3.71 3.45 3.37 3.76 3.53 3.48 3.54 3.39 3.37 3.56 3.61 3.45 3.42 3.47 3.58 3.60 3.47 3.75 3.75 3.58 3.53 3.51 3.47 3.78 3.79 3.87 3.85 3.85 3.81 3.42 3.75 3.60 3.52 3.41 3.73 3.75 3.62 3.56 3.45 3.79 3.66 3.59 3.45 3.48 3.52 5 Yr ww 3.51 3.47 3.40 3.61 3.50 7 Yr www 10 Yr www 3.36 3.29 30 Yr ww Draw two overlapping yield curves for the first and last days. Make sure that X-Axis is correctly divided from 1/12 to 30 years. Provide reasons for the slope of the yield curve and shifts of the yield curve. Date 09/01/2022 09/02/2022 09/06/2022 09/07/2022 09/08/2022 09/09/2022 09/12/2022 09/13/2022 09/14/2022 09/15/2022 09/16/2022 6 Mo 1 Mo 2 Mo 3 Mo 2.53 2.80 2.97 3.34 2.49 2.79 2.94 3.33 2.44 2.82 3.04 3.40 2.30 2.80 3.07 3.42 3.60 2.57 2.86 3.06 3.44 3.60 2.57 2.88 3.08 3.52 3.67 2.62 2.93 3.17 3.56 3.70 2.55 2.95 3.28 3.75 3.92 2.54 2.95 3.24 3.76 3.95 2.76 3.03 3.22 3.78 4.00 2.68 3.01 3.20 3.77 3.96 1 Yr 2 Yr 3.51 3 Yr 20 Yr www 3.54 3.39 3.26 3.64 3.37 3.44 3.30 3.20 3.61 3.35 3.55 3.43 3.41 3.33 3.74 3.49 3.42 3.45 3.45 3.50 3.37 3.35 3.27 3.67 3.29 3.69 3.33 3.71 3.45 3.37 3.76 3.53 3.48 3.54 3.39 3.37 3.56 3.61 3.45 3.42 3.47 3.58 3.60 3.47 3.75 3.75 3.58 3.53 3.51 3.47 3.78 3.79 3.87 3.85 3.85 3.81 3.42 3.75 3.60 3.52 3.41 3.73 3.75 3.62 3.56 3.45 3.79 3.66 3.59 3.45 3.48 3.52 5 Yr ww 3.51 3.47 3.40 3.61 3.50 7 Yr www 10 Yr www 3.36 3.29 30 Yr ww Draw two overlapping yield curves for the first and last days. Make sure that X-Axis is correctly divided from 1/12 to 30 years. Provide reasons for the slope of the yield curve and shifts of the yield curve.

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