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A)What Is the Approximate Yield to Maturity of a 10

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Essay

a)What is the approximate yield to maturity of a 10 percent coupon rate,$1000 par value bond which is currently priced at $1200 with 11 years to maturity?
b)What would be the yield to call if the call can be made in 7 years at a price of $1025?


Definitions:

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good and the actual market price they pay.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming one more unit of a good or service.

Total Utility

The overall level of satisfaction or fulfillment a consumer receives from consuming a specific quantity of a good or service.

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

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