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Which of the following statements regarding the yield calculation of a callable bond is FALSE? The assumption that underlies the yield calculation of a callable
Which of the following statements regarding the yield calculation of a callable bond is FALSE? The assumption that underlies the yield calculation of a callable bond -that it will not be called-is not always realistic, so bond traders often quote the yield to call. The yield to call (YTC) is the annual yielcof a callable bond assuming that the bond is called at the earliest opportunity. We can think of the yield to maturity of a callable bond as the interest rate the bondholder receives if the bond is not called and repaid in full. Because the price of a callable bond is higher than the price of an otherwise identical non-callable bond, the yield to maturity of a callable bond will be lower than the yield to maturity for its noncallable counterpart. Which of the following statements regarding the yield calculation of a callable bond is FALSE? The assumption that underlies the yield calculation of a callable bond -that it will not be called-is not always realistic, so bond traders often quote the yield to call. The yield to call (YTC) is the annual yielcof a callable bond assuming that the bond is called at the earliest opportunity. We can think of the yield to maturity of a callable bond as the interest rate the bondholder receives if the bond is not called and repaid in full. Because the price of a callable bond is higher than the price of an otherwise identical non-callable bond, the yield to maturity of a callable bond will be lower than the yield to maturity for its noncallable counterpart
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