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On February 9, 2015, Hunter-Gratzner, Inc. issued a 10 year bond (with a typical $1000...

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Finance

On February 9, 2015, Hunter-Gratzner, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $42. We will assume that the 2022 coupon has just been redeemed.

Initially (in 2015), the bond was sold at the premium price of $1,037.

On February 9, 2022, this bond was selling for $972.

The market rate of interest for a riskless corporate bond, of this maturity (i.e., a U.S. Treasury security), was 1.75% on February 9, 2015, which reflected market expectations about future rates of inflation.

The market rate of interest for a riskless corporate bond, of this maturity (i.e., a U.S. Treasury security), was 2.05% on February 9, 2022, which reflects market expectations about future rates of inflation.

4. What was the risk premium for this bond on February 9, 2015? [To 2 decimal places.]

5. What was the nominal yield on this bond on February 9, 2022? [To 1 decimal place.]

6. What was the current yield on this bond on February 9, 2022? [To 2 decimal place.]

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