Question
Bond Corp has just issued a callable (at par) 10-year, 12% coupon bond with quarterly coupon payments. The bond can be called at par in
Bond Corp has just issued a callable (at par) 10-year, 12% coupon bond with quarterly coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $105 and a face value of $100. Question content area bottom Part 1 What is the bond's yield to maturity? A. 1.70% B. none of the other choice is correct C. 2.79% D. 12% What is its yield to call? A. 12% B. 1.70% C. none of the other choice is correct D. 2.79% What is the price of the bond if the yield to maturity increases to 5% (assume you hold the bond until maturity)? A. none of the other choices is correct B. $100 C. $65.58 D. $92.91
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