Question: Bond analysts might be more interested in a bond's yield to call if A) the bond's yield to maturity is insufficient. B) interest rate is

Bond analysts might be more interested in a bond's yield to call if

A) the bond's yield to maturity is insufficient. B) interest rate is expected fall C) the investor only plans to hold the bond until its first call date. D) volatility is expected to rise. E) volatility is expected to fall.

5) Three years ago, you purchased a bond for $974.69. The bond had three years to maturity, a coupon rate of 8%, paid annually, and a face value of $1,000. Each year, you reinvested all coupon interest at the prevailing reinvestment rate shown in the table below. Today is the bond's maturity date. What is your realized compound yield on the bond?

Time

Prevailing Reinvestment Rate

0 (purchase date)

6.0

%

1

7.2

%

2

9.4

%

3 (maturity date)

8.2

%

A) 6.43% B) 7.96% C) 8.23% D) 8.97% E) 9.13%

Please provide an accurate answer for both of the above questions.

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