Solutions to Chapter 1

If the required rate of return is 10%, the bond sells for: PV = C/r = $60/0.10 = $600.00. Current yield = 0.098375 so bond price can be solved from the following: $90/Price = 0.098375 ( Price = $914.87. To compute the remaining maturity, solve for t in the following equation: ( t = 20.0 ................
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