Question: Problem 4: Two 20-year bonds are identical in all respect except that one allows the issuer to call the bond in return for $1,000 cash

Problem 4: Two 20-year bonds are identical in all respect except that one allows the issuer to call the bond in return for $1,000 cash at any time after five years while the other contains no call provisions. Will the yield to maturity on the two bonds differ? If so, which will be higher? Why?

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