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A Straight Bond with an Annual Coupon of 9% Will

Question 18

Essay

A straight bond with an annual coupon of 9% will be reimbursed 100% in three years. The previous coupon has just been paid and this bond currently trades at 105.25%. Its European yield-to-maturity is 7%.
a. What is its modified duration?
b. What is its semiannual yield-to-maturity?
c. What is its simple yield?

Correct Answer:

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a. 2.58
b....

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