2. Mike is interested in purchasing a bond that matures in 15 years, pays a 9.0% coupon semiannually and has a yield to maturity of 6.0%. a. What is the price of the bond? b. What is the current yield and capital gains yield? c. If the bond is callable after 5 years at a price of $1100, what would be your annual yield to call?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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2. Mike is interested in purchasing a bond that matures in 15 years, pays a 9.0% coupon semiannually
and has a yield to maturity of 6.0%.
a. What is the price of the bond?
b. What is the current yield and capital gains yield?
c. If the bond is callable after 5 years at a price of $1100, what would be your annual yield to call?
3.
Transcribed Image Text:2. Mike is interested in purchasing a bond that matures in 15 years, pays a 9.0% coupon semiannually and has a yield to maturity of 6.0%. a. What is the price of the bond? b. What is the current yield and capital gains yield? c. If the bond is callable after 5 years at a price of $1100, what would be your annual yield to call? 3.
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