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7. Consider the following bond: Coupon rate = 11% Maturity 18 years Par value $1,000 First par call in 13 years Only put date in
7. 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%. (par call means the call price is $1000)
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