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One More Time Software has 9.0 percent coupon bonds on the market with 7 years to...

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Question

Finance

One More Time Software has 9.0 percent coupon bonds on themarket with 7 years to maturity. The bonds make semiannual paymentsand currently sell for 113.0 percent of par.

Required:
(a)What is the current yield on the bonds?
(Click toselect)  0.18%  0.08%  8.36%  7.96%  8.86%
(b)The YTM?
(Click toselect)  6.52%  6.83%  3.32%  6.65%  9.50%
(c)The effective annual yield?
(Click toselect)  6.76%  0.08%  6.62%  6.42%  7.10%

Answer & Explanation Solved by verified expert
3.6 Ratings (581 Votes)
aCurrent Yield on the Bond Current Yield on the Bond Annual Coupon amount Market Price of the Bond x 100 1000 x 900 1000 x 113 x 100 9000 113000 x 100 796 b Yield to maturity of YTM of the Bond The Yield to maturity of YTM of    See Answer
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Transcribed Image Text

One More Time Software has 9.0 percent coupon bonds on themarket with 7 years to maturity. The bonds make semiannual paymentsand currently sell for 113.0 percent of par.Required:(a)What is the current yield on the bonds?(Click toselect)  0.18%  0.08%  8.36%  7.96%  8.86%(b)The YTM?(Click toselect)  6.52%  6.83%  3.32%  6.65%  9.50%(c)The effective annual yield?(Click toselect)  6.76%  0.08%  6.62%  6.42%  7.10%

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