Consider the following bond: Coupon rate = 11% Maturity = 18 years Par value = $1,000 First

Question:

Consider the following bond:

Coupon rate = 11%

Maturity = 18 years

Par value = $1,000

First par call in 13 years

Only put date in five years and putable at par value

Suppose that the market price for this bond $1,169.

(a) Show that the yield to maturity for this bond is 9.077%.

(b) Show that the yield to first par call is 8.793%.

(d) Suppose that the call schedule for this bond is as follows:

Can be called in eight years at $1,055

Can be called in 13 years at $1,000

And suppose this bond can only be put in five years and assume that the yield to first par call is 8.535%.What is the yield to worst for this bond?

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...