Suppose You Have a 10 Percent, 20-Year Bond Traded at $1,120

question 81

Multiple Choice

Suppose you have a 10 percent, 20-year bond traded at $1,120. If it is callable in 5 years at $1,150, what is the bond's approximate yield to call? Interest is paid quarterly.

• A) 7.78 percent
• B) 8.00 percent
• C) 9.40 percent
• D) 9.36 percent
• E) 9.72 percent

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Definitions:

Labor

Human effort used in production which can also include physical and mental effort.

Brain Drain

The emigration of highly trained or intelligent people from a particular country, often due to lack of opportunities or political instability.

Human Capital

The economic value of a person's experience and skills, including education, training, intelligence, skills, health, and other things employers value.

Low-income Countries

are nations with a gross national income (GNI) per capita below a certain threshold defined by international institutions like the World Bank.