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Andreyy89
3 years ago
15

A municipal dealer quotes a 2 year, 8% term revenue bond at 106. The yield to maturity is:________

Business
1 answer:
Karolina [17]3 years ago
7 0

Answer:

Yield to maturity = 4.85%

Explanation:

Municipal dealers are dealers that are registered to buy and sell municipal bonds on behalf of clients.

Yield to maturity is defined as the internal rate of return on a purchased bond

The formula is given as

Yield to maturity = $80 - ($60 premium / 2 years to maturity) ÷

($1,060 + $1,000) / 2

Yield to maturity = ($80 - $30) ÷ 1,030

Yield to maturity = 50 ÷ 1,030 = 0.0485 = 4.85%

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