Harold Reese must choose between 2 bonds:
Bond X pays $80 annual interest and gas a...
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Harold Reese must choose between 2 bonds:
Bond X pays $80 annual interest and gas a market value of$820. It gas 10 years of maturity
Bond Z pays $90 annual interest and has a market value of$780. In the next six years to maturity is soon as the part valueof the bond is $1000
a. Compute the current year old on both bonds ( do not roundin to mediate calculations. And put your answer as a percentrounded to two decimal places.)
b. which bond should be selected based on your answers to parta?
c. a drawback of current yield is That it does not considerthe total life of the bond. For example, the approximate yield tomaturity of bond ex is 10.99%. What is the approximate y’all thematurity on bond is he? The exact yield to maturity? ( UCapproximation formula to compute the approximate year old tomaturity and use the calculation method to compute the exact fieldto maturity do not round intermediate calculations and put youranswer to as a percent rounded to two decimal places.)
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