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1 a Calculate the Yield to Call (YTC) of a 20-year semiannual coupon-ed par bond with a coupon rate of 9% and a face value

1 a Calculate the Yield to Call (YTC) of a 20-year semiannual coupon-ed par bond with a coupon rate of 9% and a face value of $1000. This bond was recalled 5 years into the life of the bond at a call price of $1025.

b Why can the YTM of this bond be determined without calculation?

c Give two reasons why this bond's YTC is greater than its YTM.

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