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  3. 41. a bond has an expected yield-to-maturity of 6%

41. A bond has an expected yield-to-maturity of 6% and an 8% probability of default....

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Finance

41. A bond has an expected yield-to-maturity of 6% and an 8% probability of default. If the bond defaults, the bondholders should receive 80% of the market value. If fairly priced, the bond should have a promised yield-to-maturity of (a) 3.7%. (b) 9.2%. (c) 5.8%. (d) 8.3%. (e) 10.1%.

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