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Jill wants to invest in a four-year bond that pays a coupon of 11 percent annually....

Jill wants to invest in a four-year bond that pays a coupon of 11 percent annually. The bonds are selling at $962.13 today and have a face value of $1,000. If she buys this bond and holds it to maturity, what would be the yield? (USE EXCEL or FINANCIAL CALCULATOR. Round to the closest answer.)

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Answer #1

Coupon = 0.11 * 1000 = 110

Yield to maturity = 12.25%

Keys to use in a financial calculator: FV 1000, PV -962.13, N 4, PMT 110, CPT I/Y

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