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Gamma has just issued a five-year bond with an early redemption clause (early redemption price equal to par). The coupon rate is 7%. Early redemption
Gamma has just issued a five-year bond with an early redemption clause (early redemption price equal to par). The coupon rate is 7%. Early redemption will be possible on each coupon detachment date. The bond is currently trading at 105% of its $ 100 face value. What is the profitability at maturity of this bond (Yield to Maturity - YTM)? So what profitability with exercise of the early repayment clause (Yield to Call - YTC)? 5 Options for question 21: 5.81%; 1.90% 5.81%; 3.02% 5.7%; 3.02
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