A $1,000 4-year par value bond with a 5 percent annual coupon has a market price of $1,027.06 has a yield to maturity of 4.25 percent. The bond can be called at the end of each of the first three years with a yield to call of 4.26 percent in the first year, 4.27 percent in the second year, and 4.29 percent in the third year. What year would produce the yield to worst? First year Second year Third year Fourth year
A $1,000 4-year par value bond with a 5 percent annual coupon has a market price of $1,027.06 has a yield to maturity of 4.25 percent. The bond can be called at the end of each of the first three years with a yield to call of 4.26 percent in the first year, 4.27 percent in the second year, and 4.29 percent in the third year. What year would produce the yield to worst? First year Second year Third year Fourth year
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 4P
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- A $1,000 4-year par
value bond with a 5 percent annual coupon has a market price of $1,027.06 has a yield to maturity of 4.25 percent. The bond can be called at the end of each of the first three years with a yield to call of 4.26 percent in the first year, 4.27 percent in the second year, and 4.29 percent in the third year. What year would produce the yield to worst?
- First year
- Second year
- Third year
- Fourth year
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