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What Is the Yield to Maturity of a Nine-Year Bond

question 64

Multiple Choice

What is the yield to maturity of a nine-year bond that pays a coupon rate of 20% per year, has a $1,000 par value, and is currently priced at $1,407? Assume annual coupon payments.


Definitions:

Determinant

A scalar value that can be computed from the elements of a square matrix and encodes certain properties of the matrix, such as whether it has an inverse.

Minors

In the context of matrices, minors are the determinant of the square matrices obtained by deleting one row and one column from a larger square matrix.

System of Linear Equations

A collection of one or more linear equations involving the same variables.

Matrix

A rectangular array of numbers, symbols, or expressions, arranged in rows and columns.

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