Determine and evaluate what is the yield

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Problem 1: Consider a 30-year U.S. corporate bond paying 7 percent coupon. The bond has 20 years left to maturity and is currently priced at $970. The bond is callable in 6 years at a 8 percent call premium. If an investor can reinvest the call price at the prevailing market interest rate of 8 percent at the call date, what is his yield?

Reference no: EM132740501

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