Question: You are asked to put a value on a bond which promises eight annual coupon payments of 7 0 and will repay its face value

You are asked to put a value on a bond which promises eight annual coupon payments of 70 and will repay its face value of 1000 at the end of eight years. You observe that other similar bonds have yields to maturity of 9 per cent. How much is this bond worth? You are offered the bond for a price of 1030.44. What yield to maturity does this represent?

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