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maturity, 8% coupon bond paying coupons semiannually is callable in five years a

ID: 2751840 • Letter: M

Question

maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of no more questions The bond currently sells at a yield to maturity of 7% (3.5% per half-year). What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % What is the yield to call if the call price is only $1,050? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % 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? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call %

Explanation / Answer

Matuirity period is not clear.

Yield to Call Annual Interest 8% Call Price 1100 market Price 886.83 Number of years to call 2 YTC callable fter 5 year 4.30% YTC call price 1050 3.38% YTC when callable after 2 year 10.74%