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must be completed by hand A coupon bond that has a $1,000 par value and a...

must be completed by hand

A coupon bond that has a $1,000 par value and a coupon rate of 10%. The bond is currently selling for $1,250 and has eight years to maturity. What is the bond’s yield to maturity? (An equation is sufficient.)

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Answer #1

-1250+10%*1000/(1+ytm)+10%*1000/(1+ytm)^2.........10%*1000/(1+ytm)^8+1000/(1+ytm)^8=0

=>-1250+100/ytm*(1-1/(1+ytm)^8)+1000/(1+ytm)^8=0

=>ytm=6%

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