The Following Information Relates to Questions
a Bond with 5

question 35

Multiple Choice

The following information relates to Questions
A bond with 5 years remaining until maturity is currently trading for 101 per 100 of par value. The bond offers a 6% coupon rate with interest paid semi-annually. The bond is first callable in 3 years, and is callable after that date on coupon dates according to the following schedule: $\begin{array}{lc}\text { End of Year } & \text { Call Price } \\\hline 3 & 102 \\4 & 101 \\5 & 100 \\\hline\end{array}$

-The bond's annual yield-to-first-call is closest to:

• A) 3.12%.
• B) 6.11%.
• C) 6.25%.

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Definitions:

Avoidance Procedure

A behavioral training method where learning occurs through the avoidance of an unpleasant stimulus.

Aversive Stimulation

A psychological technique that uses unpleasant stimuli to reduce or eliminate undesirable behaviors.

Positive Reinforcer

A stimulus which, when presented after a behavior, increases the probability of that behavior being repeated.

Laughing

The action of making spontaneous sounds and movements of the face and body that are the instinctive expressions of lively amusement and sometimes also of contempt or derision.