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Problem 2 a. An investor holds a callable bond of BD Motors Ltd, with a face value of BDT 15,000, a coupon rate of 6%,

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Problem 2 a. An investor holds a callable bond of BD Motors Ltd, with a face value of BDT 15,000, a coupon rate of 6%, and 20 years to maturity. The bond becomes callable in 12 years at a call price of BDT 16,500 , Given that the current market price is BDT 17,800 , calculate the yield of holding BD Motors' bond until it is called. b. What would be the yield if the call price were BDT 18,500? Does the Yield to Call (YTC) increase or decrease? Briefly explain your understanding

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