You Own a Bond with a Make-Whole Call Provision

question 87

Multiple Choice

You own a bond with a make-whole call provision. The bond matures in 11 years, but is being called today. The coupon rate is 8% with interest paid semiannually. What is the current call price if the discount rate is 7.2% and the make-whole call provision?

• A) $932.84
• B) $977.78
• C) $1,060.08
• D) $1,096.22
• E) $1,204.55

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