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The market price of a semi-annual pay bond is $981.58. It has 19.00 years to maturity...

The market price of a semi-annual pay bond is $981.58. It has 19.00 years to maturity and a coupon rate of 7.00%. Par value is $1,000. What is the effective annual yield? (Round to 4 decimal places)

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The market price of a semi-annual pay bond is $981.58. It has 19.00 years to maturity and a coupon rate of 7.00%. Par value is $1,000. What is the effective annual yield?

PV = -951.58

PMT = 1,000 * 0.07/2 = 35

N = 19 * 2 = 38

FV = 1,000

CPT I/Y

I/Y = 3.70523138947%

Yield to maturity = 3.7052314% * 2 = 0.074104628

Effective annual yield = (1 + 3.70523138947%)^2 - 1

Effective annual yield = 0.07547750175

Effective annual yield = 7.547750175%

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