A Company Issues a 20-Year,callable Bond at Par with an 6

question 21

Multiple Choice

A company issues a 20-year,callable bond at par with an 6% annual coupon payments.The bond can be called at par in three years or any time after that on a coupon payment date.The call price is $110 per $100 of face value.What is the yield to call?

• A)4%
• B)12%
• C)6%
• D)9%

---

Definitions:

Corrective Action

Steps taken to fix a problem, error, or discrepancy to prevent its recurrence.

Problem Solvers

Individuals or entities skilled in analyzing issues and developing effective solutions.

Systematic Thinking

An approach to problem-solving that uses a step-by-step method to understand complex issues by breaking them down into their constituent parts.

High Uncertainty

Situations or environments characterized by unpredictability, lack of clear information, or inability to foresee outcomes, requiring flexible and adaptive responses.