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Question

A $1,000 par value bond sells for $1,216. It matures in 25 years, has a 14 percent coupon, pays interest

semiannually, and can be called in 5 years at a price of $1,100. The bond's yield to maturity is: (Round the answer to two decimal places.)

a.​10.00%.

b.​6.05%.

c.​11.38%.

d.​11.26%.

e.​10.06%

Top Answer

YTM would be 10%... View the full answer

IMG_3484.jpg

For callable bond brice calculated as
callable bond price - C
CP
1
YTC
I + YTC KIT
(1 + XTC 1 27
Wthere, callable bond price = $ 1216
C : coupon payment annual = 14 4 06 1500= $140
YTL = YTM = We...

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