Dominique LeBlanc is the owner of a new ten year $50,000 8% par value bond...
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Dominique LeBlanc is the owner of a new ten year $50,000 8% par value bond with a Bermuda options and annual coupons. Allowable call dates are tat the ends of years 6 through 10, and the call premium at the end of year n is 300(10-n). Dominique purchased the bond for $51,248.
a- find the lowest yield that Dominique may receive during the period she hold the bond as well as the highest.
b- Upon receipt, Dominique deposits each coupon and the redemption amount in an account earned 6%. Find the lowest yield that Dominique may receive during the 10 year period and the highest.
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