Suppose You Have a 12%,20 Year Bond Traded at $850

question 102

Multiple Choice

Suppose you have a 12%,20 year bond traded at $850.If it is callable in 5 years at $1,100,what is the bond's yield to call? Interest is paid semiannually.

• A) 8%
• B) 9.0%
• C) 18.0%
• D) 9.4%
• E) 16.5%

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