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No excel please! A 5% bond with face amount 1000 pays annual coupons and is callable any coupon date from 10 years after issue to
No excel please!
A 5% bond with face amount 1000 pays annual coupons and is callable any coupon date from 10 years after issue to maturity, 20 years after issue, at 1100. An investor buys this bond at the highest price that will guarantee his desired yield rate regardless of when the bond is called. For the same price, the investor can purchase a regular 7.3% coupon, 1000 face value 20-year bond with semiannual coupons and a 10% nominal yield. What is the investor's desired yield rate ? (Use the solver of your choice to find the rate.)
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