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A corporate bond is quoted at $955 based on $1,000 par. Today is 12/31/2021. Assume that transaction date and settlement date is the same. The
A corporate bond is quoted at $955 based on $1,000 par. Today is 12/31/2021. Assume that transaction date and settlement date is the same. The bond has 30-year maturity. The bond also has a callable option. The option calls for retirement of the bond in 10 years at $1,010 par instead of $1,000 par. The coupon rate is 12%. Which yield will a bondholder likely to get: yield to maturity or yield to call? Assume semi-annual coupons.
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