QUESTION 11

Assume a hypothetical 30-year bond is issued on 01 February 2021 at a price of 97.195 (as a percentage of par), Each bond has a par value of 1,000, The bond is collable

"in whole or in part" every 01 February from 2031 at the option of the issuer. The call prices are shown below.

Assume a hypothetical 30-year bond is issued on 01 February 2021 at a price of 97.195 (as a percentage of par), Each bond has a par value of 11.250, Th

Year

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

Call price

103.870

103.485

103.000

102.709

102.322

101 955

101.548

101 161

101.774

100.387

100.000

Answer the following questions:

A. What is the call period for this bond?

B. What is the call premium (per $1,000 in par value) in 2033?

C. What this type of callable bond is: American, European or Bermuda, and why?