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Consider a one year bond with a coupon of 10%

Finance

Consider a one year bond with a coupon of 10%. The current price is $800 with a maturity at par in one year. What is the yield to maturity? Suppose there’s a 50% probability of default on this bond and in the event of a default, there would be a 70% recovery rate with no payment of interest. What is the expected return of this bond.

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