A $1,000 Par Value Bond Is Callable in 4 Years

question 9

Multiple Choice

A $1,000 par value bond is callable in 4 years. The call premium is $40. The coupon rate on the bond is 7% with payment twice a year, and the yield-to-call is 4.7%. What is the current price?

• A) $1,098.00
• B) $1,116.20
• C) $1,095.77
• D) $1,119.02
• E) $1,066.00

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Definitions:

Conjunction

A part of speech that connects words, phrases, or clauses within sentences.

Symbolize

To represent something abstract by a symbol or symbols.

X-rayed

The process of examining the internal structure of objects using X-rays.

Symbolize

To represent or stand for something else, especially through the use of symbols or symbolic actions.