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- Ellison firm simply issued a bond with 15% annual coupon rate of interest on a $1,000 par worth bond with 15 years left to maturity. Bonds of similar maturity now promote to yield 13% return
(a) How a lot would you be prepared to pay for one in every of these bonds ? Why?
(b) If the bond is promoting for $1,300 what's the yield to maturity? Would the YTM replicate long-term charges, or short-term charges? Clarify.
(c) What's the relationship between the worth of the bond and its YTM, and the chance and it is YTM?Get accounting project homework assist