Question
A 20-year maturity, 7% coupon bond paying coupons semiannually is callable in five years at a call price of $1,050. The bond currently sells at
A 20-year maturity, 7% coupon bond paying coupons semiannually is callable in five years at a call price of $1,050. The bond currently sells at a yield to maturity of 6.00% (3.00% per half-year).
. What is the yield to call annually?
b. What is the yield to call annually if the call price is only $1,000? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
c.What is the yield to call annually if the call price is $1,050, but the bond can be called in two years instead of five years? (Negative amounts should be shown with a minus sign. Do not round intermediate calculations. Round your answer to 3 decimal places.)
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