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Assume today is November 1, 2019 and that all bonds pay interest annually with a face value of $1,000. YIM - Current yield +
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Answer #1

1.
Using financial calculator
N=10
PMT=6%*1000=60
FV=1000
PV=-1175
CPT I/Y=3.86%

2.
The bond is trading at premium as price is more than par value of 1000

3.
Capital gains yield=YTM-Current Yield=3.86%-6%*1000/1175=-1.25%
As capital gains yield is negative, it means the price of the bond will decrease in one year if yield to maturity remained constant

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