A 30-year-maturity, 7% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 6% (3% per half-year). (Please show calculations/formauls, not excel sheet necessarily) a. What is the yield to call? b. What is the yield to call if the call price is only $1,050? c. What is the yield to call if the call price is $1,100 but the bond can be called in two years instead of five years?
A 30-year-maturity, 7% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 6% (3% per half-year). (Please show calculations/formauls, not excel sheet necessarily) a. What is the yield to call? b. What is the yield to call if the call price is only $1,050? c. What is the yield to call if the call price is $1,100 but the bond can be called in two years instead of five years?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A 30-year-maturity, 7% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 6% (3% per half-year). (Please show calculations/formauls, not excel sheet necessarily)
a. What is the yield to call?
b. What is the yield to call if the call price is only $1,050?
c. What is the yield to call if the call price is $1,100 but the bond can be called in two years instead of five years?
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