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1- The price of a 20 year, 12% bond is $875. There is an option, and...

1- The price of a 20 year, 12% bond is $875. There is an option, and the firm may purchase the bond back in 4 years. Derive the yield to maturity and the yield to call.

2- Compute the price of a 30 year 9% bond, if yields to maturity are 6% presently. Convince that the price is reasonable.

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jeff jeffy answered 1 year ago
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