A Bond Has 6 Years Until It Can Be Called

question 62

Multiple Choice

A bond has 6 years until it can be called, a 7% coupon, and a $1,000 face value. The bond has a market value of $1,031.90 and a yield to call of 7.35%. What is the call premium?

• A)$45
• B)$55
• C)$65
• D)$75
• E)$85

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