A Company Issues a Callable (At Par)five-Year,7% Coupon Bond with Annual

question 29

Multiple Choice

A company issues a callable (at par) five-year,7% 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 price of $110 per $100 of face value.What is the yield to worst of this bond when it is released?

• A)1.40%
• B)2.73%
• C)3.00%
• D)4.71%
• E)5.66%

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