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Chocolate and Rum, Inc. offers a 7% coupon bond with semiannual payments and a yield to maturity of 7.73%. The bonds mature in 9 years. What is the market price of a $1,000 face value bond?

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019

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A 15-year, $1,000 face value bond with a 10% semiannual coupon has a nominal yield to maturity of 7.5%. The bond, which may be called after five years, has a nominal yield to call of 5.54%. What is the bond’s call price?

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4. (4 points)
(a) Assume that a one year bond that has no interest coupon payment with a maturity value (face value) of $1,000 sold for $900. Show the interest rate that this bond will pay when it matures.
(b) If the prices of similar bonds are selling next month for $950, show the interest rate that these bonds pay when they mature.

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