A 30-year maturity, 6% coupon bond paying coupons semiannually is callable in five years at a call

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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).

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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ISE Essentials Of Investments

ISBN: 9781265450090

12th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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Question Posted: Nov 18, 2023 11:30 PM

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A 30-year maturity, 6% coupon bond paying coupons semiannually is callable in five years at a call

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a The yield to call YTC is the discount rate that equates the present value of the bonds future cash ...View the full answer

ISE Essentials Of Investments

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