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Hi,
Can you explain how you get 40?
Hi,
Redemption yieldis yield required by bond holders (or market rate).
n – number of years.
MV – selling price.
Hence,
MV of bond =Coupon rate*Face value/(1+yield)^1+….(1+Coupon rate)*Face value/(1+yield)^n.
Sole equasion.By trying and error, for example.
I have got 75. Unexpected. I expect near 60
