A $1,000 Par Value Bond Is Callable in 7 Years

question 52

Multiple Choice

A $1,000 par value bond is callable in 7 years. The bond has a price of $1,011.42, a coupon rate of 9 percent, and a yield-to-call of 9.6%. What is the call premium with semi annual coupon payments?

• A) $57
• B) $46
• C) $68
• D) $74
• E) $80

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