Consider the following bond:

Coupon rate Maturity 11% 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%.

c. Show that the yield to put is 6.942%.

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?

AppendixLO1