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Suppose a 10-year, 10%, semiannual coupon bond with a par value of $1,000 is currently selling for $1,365.20, producing a nominal yield to maturity of
Suppose a 10-year, 10%, semiannual coupon bond with a par value of $1,000 is currently selling for $1,365.20, producing a nominal yield to maturity of 7.5%. However, it can be called after 4 years for $1,200. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, would you be more likely to earn the YTM or the YTC?
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