Question: 1 . A $ 1 0 0 0 par bond has a coupon rate of 1 3 % and matures in 1 2 years. The

1. A $1000 par bond has a coupon rate of 13% and matures in 12 years. The bond is callable with a semiannually call penalty of one year's interest.
a. If comparable bonds yield 10%, what is the price of the bond?
b. What is the current yield of the bond?
c. If the bond can be called four years from now, how will that affect the price of the bond? (show
calculations)

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