A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,100. The bond currently sells at a yield to maturity of 7%. a. What is the yield to call? b. What is the yield to call if the call price is $1,050? c. What is the yield to call if the call price is $1,100 but the bond is callable in 2 years instead of 5?
A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,100. The bond currently sells at a yield to maturity of 7%. a. What is the yield to call? b. What is the yield to call if the call price is $1,050? c. What is the yield to call if the call price is $1,100 but the bond is callable in 2 years instead of 5?
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, 8% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1,100. The bond currently sells at a yield to maturity of 7%. a. What is the yield to call? b. What is the yield to call if the call price is $1,050? c. What is the yield to call if the call price is $1,100 but the bond is callable in 2 years instead of 5? (PLEASE DO NOT JUST SHOW EXCELI SHOW THE CALCULATIONS)
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