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General Electric has just issued a callable (at par) ten-year 8% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $104 and a face value of $104.
a) What is the bond's yield to maturity and yield to call?
The yield to maturity is.............. %. (Round to two decimal places.)
b) What is the bond's yield to call?
The yield to call is------------------ %. (Round to two decimal places.)
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Bond X is noncallable and has 20 years to maturity, a 10% annual coupon, and a $1,000 par value. Your required return on Bond X is 9%; and if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5, years the yie..
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