Solved: Suppose that investors opportunity cost reduces to 55 what, Finance Basics

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Suppose that investors opportunity cost reduces to 55 what

A bond has 8 years till maturity, par value is $1,000, coupon rate is 6%, and is traded in the market for $900. In addition, assume that the bond may be called in 2 years at $1,150 payoff which is par + premium. What is the bond's current yield, YTM, and YTC? Suppose that investors' opportunity cost reduces to 5.5%, what will be the bond's trading value at that time? Show your work in detail, and provide references.

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Finance Basics: Suppose that investors opportunity cost reduces to 55 what

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Finance Basics: Suppose that investors opportunity cost reduces to 55 what

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