Solution-What is the bond yield to call

What is the bond yield to call

Reference no: EM131235559

Suppose a 10-year, 10 percent, semi annual coupon bond with a par value of $1000 is currently selling for $1,135.90, producing a yield to maturity (YTM) of 8 percent. However, the bond can be called after 5 years for a price of $1,025.

1. What is the bond's yield to call (YTC)?

2. If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?

Reference no: EM131235559

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What is the bond yield to call

Reference no: EM131235559

Reference no: EM131235559

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