(1) Suppose an ordinary bond has a coupon rate of 10 percent, the yield to maturity is quoted at 12 percent. This is sem

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(1) Suppose an ordinary bond has a coupon rate of 10 percent, the yield to maturity is quoted at 12 percent. This is sem

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(1)
Suppose an ordinary bond has a coupon rate of 10 percent, the yield to maturity is quoted at 12 percent. This is semiannual coupon, the bond matures in ten years. Calculate the bond’s price. Calculate the effective annual yield on this
bond.
(2)A taxable bond has a yield of 9%, and a municipal bond has a yield of 6.5%. If you
are in a 30% tax bracket, explain which bond you will prefer. At what tax rate would
you be indifferent between these two
bonds?
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