Problem based on bond and market yield


Problem: Compute based on the following, consider the following:

1. Bond w/5 yr term to mature, 12% coupon (annual), market yield 10%.

2. Bond w/4 yr term to mature, 12% coupon (annual), market yield 10%.

3. Compare answers for 1 & 2, discuss implications of this for classical immunization.

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Finance Basics: Problem based on bond and market yield
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