Question: Work out on paper please. 8. A 5-year maturity, 10% coupon bond paying coupons monthly is callable in 2 years at a call price of

Work out on paper please. 8. A 5-year maturity, 10% coupon

Work out on paper please.

8. A 5-year maturity, 10% coupon bond paying coupons monthly is callable in 2 years at a call price of $1,075. The bond currently sells at a yield to maturity of 12% per year. What is the yield to call? b. What is the yield to call if the call price is $1,125 and the bond can be called in 1 year instead of 2 years? a

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