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Home / Questions / A firms bonds have a maturity of 10 years with a $1000 face value have an 8% semiannual co...

A firms bonds have a maturity of 10 years with a $1000 face value have an 8% semiannual coupon are callable in 5 years at $1053 and currently sell at a price of $110131 What is their nominal

A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,053, and currently sell at a price of $1,101.31.

What is their nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.

____ %

What is their nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places.

___ %

What return should investors expect to earn on these bonds?

I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.

II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.

III. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.

IV. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC.

V. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.


-Select-IIIIIIIVV

 

Apr 06 2020 View more View Less

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