Coupon bond with annual coupon payments

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1. A company issues a callable (at par) 20-year, 5% coupon bond with annual coupon payments. The bond can be called at par in one year after release or any time after that on a coupon payment date. On release, it has a price of $102 per $100 of face value. What is the yield to maturity of this bond when it is released?

A) 2.40%

B) 4.84%

C) 5.60%

D) 6.66%

2. A company issues a callable (at par) 20-year, 5% coupon bond with annual coupon payments. The bond can be called at par in one year after release or any time after that on a coupon payment date. On release, it has a price of $102 per $100 of face value. What is the yield to call of this bond when it is released?

A) 2.94%

B) 4.11%

C) 5.60%

D) 6.66%

Reference no: EM131915113

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