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You have owned a 20 year bond for 5 years now. The bond has a 3% annual coupon, par value of $1000, and a current
You have owned a 20 year bond for 5 years now. The bond has a 3% annual coupon, par value of $1000, and a current YTM of 4.26% on the market. If the bond has a call provision that could be exercised in 4 year, at a premium of $1100, what yield do you anticipate earning on the call? and do you anticipate earning the YTM to the YTC return (assuming the current YTM of 4.26% is maintained for the next 4 years)
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