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Consider the following bond: Coupon rate = 1 1 % Maturity = 1 8 years Par value = $ 1 , 0 0 0 First
Consider the following bond:
Coupon rate
Maturity years
Par value $
First par call in years
Only put date in five years and puttable at par value
Suppose that the market price for this bond $
a Show that the yield to maturity for this bond is by using the formula.
b Show that the yield to first par call is
c Show that the yield to put is
d Suppose that the call schedule for this bond is as follows:
Can be called in eight years at $
Can be called in years at $
And suppose this bond can only be put in five years and assume that the yield to eight yearscall is What is the yield to worst for this bond?
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