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New Homes has a bond issue with a coupon rate of 7.45 percent that matures in...

New Homes has a bond issue with a coupon rate of 7.45 percent that matures in 11.5 years. The bonds have a face value of $1,000 and a market price of $1,095.67. Interest is paid semiannually. What is the yield to maturity? A. 6.27 percent B. 3.48 percent C. 3.13 percent D. 6.96 percent

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Answer 6.27%

В C 1 2 Face Value 3 Price of Bon 4 Years to Ma 5 Coupon Rate 6 Frequency $1,000 $1,096 11.5 7.45% 2 7 YTM 6.27%A B 1 2 Face Value 1000 3 Price of Bond today 1095.67 4 Years to Maturity 11.5 5 Coupon Rate 6 Frequency 0.0745 2 7 YTM B6*RA

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