A Company Issues a Callable (At Par)ten-Year,6% Coupon Bond with Annual

question 78

Multiple Choice

A company issues a callable (at par) ten-year,6% coupon bond with annual coupon payments.The bond can be called at par in one year after release or any time after that on a coupon payment date.On release,it has a yield to maturity of 4.8%,which is below the yield to call.What is the price of this bond per $100 of face value when it is released?

• A)$101.15
• B)$109.36
• C)$100.00
• D)$104.80
• E)$95.42

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Definitions:

Internal Validity

The degree to which a study establishes a trustworthy cause-and-effect relationship between a treatment and an outcome.

Variable Changes

Alterations in the value or status of variables within an experiment or study.

Correlation Coefficient

A numerical measure that describes the direction and degree of relationship between two variables, ranging from -1 to 1, where 0 indicates no linear relationship.

Numerical Index

A quantitative measure or indicator that represents statistical data points or trends.