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Essentials of Investments- Bodie, Kane and Marcus. WITHOUT EXCEL and WITHOUT FINANCIAL CALCULATOR PLEASE! 1. A 20-year bond with a 6.5% semiannual coupon has a

Essentials of Investments- Bodie, Kane and Marcus.

WITHOUT EXCEL and WITHOUT FINANCIAL CALCULATOR PLEASE!

1. A 20-year bond with a 6.5% semiannual coupon has a 5-year call option with a call price of $ 1010. Currently the bond is sold with a YTM of 6%.

a. What is the YTC? b. What would be the YTC if the exercise price were $ 960? c. What would be the YTC if the exercise price were $ 960 but the bond was called in 2 years?

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