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Business, 12.04.2021 22:10 toxsicity

Dave invests in a bond that yields 3.50% annual effective for 10 years. The bond pays coupons at a rate of 3.50%, payable semi-annually. It has a redemption value of $75. Mike invests in a 5 year bond. The bond pays coupons at a rate of 14.00%, payable quarterly. It has a redemption value of $150. Mike paid twice the price for his bond compared to what Dave paid. Both bonds have a face amount of $100. Calculate the annual effective yield for Mike's bond.

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