What is the effective annual yield on bond

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Company Z has issued bonds with a par value of $1000, 20 years to maturity, and a coupon rate of 4%. The bond makes semiannual payments. The yield to maturity (YTM) is 6% per annum. What is the current price of the bond? What is the effective annual yield on this bond? Is this a discount or a premium bond? Discuss. If the market interest rate increases, what happens to this bond price. Discuss. If this bond would sell at par what could you tell about the YTM?

(Please Formulas)

Reference no: EM131571387

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