Answers to Text Discussion Questions

Why is it slightly higher than the yield to maturity? 12-9. $100/$1,090.90 = 9.17%. It is higher than yield to maturity because it does not take into consideration the fact that the bond price will decline from $1,090.90 to $1,000 over the next 20 years. This factor lowers the yield to maturity. Current yield and yield to maturity comparison. 10. ................
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