Galt Industries Has Just Issued a Callable,$1000 Par Value,five-Year,6% Coupon

question 11

Multiple Choice

Galt Industries has just issued a callable,$1000 par value,five-year,6% coupon bond with semiannual coupon payments.The bond can be called at par in three years or anytime thereafter on a coupon payment date.If the bond is currently trading for $978.94,then its yield to call is closest to:

• A)3.4%.
• B)6.0%.
• C)6.5%.
• D)6.8%.

---

Definitions:

Prompting

In behavioral psychology, it involves giving cues or hints to facilitate the desired response from an individual.

Shaping

A method of operant conditioning by which successive approximations of a desired behavior are reinforced until the exact behavior is achieved.

Reinforcement

In psychology, a process by which a behavior is strengthened or increased, often through rewards or positive outcomes, following its occurrence.

Empirical Approach

A method of inquiry that relies on observation, experimentation, and evidence rather than theory alone.