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John Buys a $2000 Bond That Is Redeemable at 102

Question 13

Multiple Choice

John buys a $2000 bond that is redeemable at 102 in 5 years.It pays semi-annual coupons at j2 = 4%.John pays $1970.20 for the bond.Using the method of averages,what is the yield rate j2?


A) 3.29%
B) 3.73%
C) 4.33%
D) 4.69%

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