Question
9) Use the following information for Questions 9-10. A bond with 5 years until maturity is currently trading for 101 per 100 of par value.
9) Use the following information for Questions 9-10.
A bond with 5 years until maturity is currently trading for 101 per 100 of par value. The bond offers a 5% coupon rate with interest paid semiannually. The bond is first callable in 3 years, and is callable after that date on coupon dates according to the following schedule:
| End of Year | Call Price |
| 3 | 102 |
| 4 | 101 |
| 5 | 100 |
What is the bond's current yield-to-maturity? Express your answer in percentage terms (3.5 not 0.035) rounded to 3 decimal places.
10)
A bond with 5 years until maturity is currently trading for 101 per 100 of par value. The bond offers a 5% coupon rate with interest paid semiannually. The bond is first callable in 3 years, and is callable after that date on coupon dates according to the following schedule:
| End of Year | Call Price |
| 3 | 102 |
| 4 | 101 |
| 5 | 100 |
What is the bond's yield-to-worst? Express your answer in percentage terms (3.5 not 0.035) rounded to three decimal places.
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Fundamentals Of Futures And Options Markets
Authors: John C. Hull
8th Global Edition
1292155035, 9781292155036
