The Following Information Relates to Questions
a Bond with 5

question 29

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 yield-to-worst is closest to:

• A) 2.88%.
• B) 5.77%.
• C) 6.25%.

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Definitions:

Exchange Rates

The value of one currency expressed in terms of another currency, used to determine how much of one currency you can exchange for another.

Trade Deficits

A situation in which a country's imports exceed its exports, resulting in a negative balance of trade.

Speculation

The act of investing in financial assets with the hope of profiting from future price changes, often involving significant risk.

Nation's Currency

The legally accepted form of money that circulates within a country and serves as a medium of exchange, store of value, and unit of account.