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A company has a bond that yields (YTM) 1.70% and recently had capital gains of -1.00%...

A company has a bond that yields (YTM) 1.70% and recently had capital gains of -1.00% ending with the price of 1616.1318206 then the interest payment is closest to? a. $2,588.24 b. 0.03% c. 0.03% d. $44.00

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Answer #1

Answer: Option d is correct
Yield to Maturity = Current Yield + Capital Gain Yield
Substituting the values, we get;
1.70% = Current Yield -1.00%
=>Current Yield = 1.70%+1.00%=2.70%

Interest Payment = (2.70%)*(1616.1318206)= 43.6356 or $44 (Rounded to the nearest whole number)

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