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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Assume that an investor is looking at two bonds. Bond A is a 20-year, 9% (semi-annual pay) bond that is priced to yield 10.5%. Bond B is a 20-year, 8% (annual pay) bond that is priced to yield 7.5%. Both bonds carry five-year call deferments and call prices (in five years) of $1050.
a. Which bond has the higher current yield?
b. Which bond has the higher YTM?
c. Which bond has the higher YTC?
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