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Home Q & A Board Other Fields Homework Help Business Finance
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johnpaech johnpaech
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Posts: 1098
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6 years ago
The YTM of a 4 year default free security with a face value of $1000 and an annual coupon rate of 5.25% is closest to:
A) 5.2%
B) 5.0%
C) 4.9%
D) 5.25%
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
Read 63 times
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wrote...
#1
6 years ago
B
Explanation:  B) P = 52.50/1.058 + 52.50/1.0552 + 52.50/1.0523 + 1052.50/1.0504 = 1007.78

PV = -1007.78
PMT = 52.50
FV = 1000
N = 4
Compute I = 5.030 or 5.0%
johnpaech Author
wrote...
#2
5 years ago
You took a load off my back, thanks for answering correctly
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