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What is the yield to call? What is the yield to call if the call price is only $1,050? 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?

What is the yield to call? What is the yield to call if the call price is only $1,050? 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
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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32. A 30-year maturity, 6% 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 5% (2.5% per half-year). (@ LO 10-4) 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 $1,10o but the bond can be called in two years instead of five years?
Transcribed Image Text:32. A 30-year maturity, 6% 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 5% (2.5% per half-year). (@ LO 10-4) 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 $1,10o but the bond can be called in two years instead of five years?
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