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Azero-coupon bond with face value $1,000 and maturity of five years sells for $755.22. a. What is its yield to maturity? (Rou
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Answer #1

a.

Yield to Maturity = (1,000/755.22)1/5 - 1

Yield to Maturity = 5.78%

b.

Yield to Maturity = (1,000/739)1/5 - 1

Yield to Maturity = 6.24%

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