A Company Issues a Callable (At Par) Ten-Year, 6% Coupon

question 22

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 price of $104 per $100 of face value. What is the yield to maturity of this bond when it is released?

• A) 0.60%
• B) 1.92%
• C) 4.00%
• D) 5.47%

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Definitions:

Kamakura Sculptor

Identifies a sculptor or the style of sculpture originating from the Kamakura period in Japan, spanning from 1185 to 1333, known for its realistic and expressive Buddhist statues.

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A prominent Japanese Buddhist monk known for his missionary work and public preaching, often depicted in sculptures showing him in a dynamic posture with six miniature Amida Buddhas emanating from his mouth.

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An East Asian tower, usually associated with a Buddhist temple, having a multiplicity of winged eaves; thought to be derived from the Indian stupa.