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3. ABC issued 7 3/8% bonds with annual interest payments that matures in 2042, but is callable at $1,037.08 in 2021, seven years from today.

3. ABC issued 7 3/8% bonds with annual interest payments that matures in 2042, but is callable at $1,037.08 in 2021, seven years from today. What is its yield to call if an investor bought a $1,000 bond for $900? (Hint: the yield to call is computed by replacing the maturity value M by the call price and the number of years until maturity n by the number of years until the call.)

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