Determine is the ytc less than or more than the ytm

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Reference no: EM13333568

ABC has a twenty year bond that has just been issued with an 8% coupon rate. It pays interest semiannually and has a par value of $1000. It may be called in five years at a price of $1040. The bond is selling right now for $1100 in the open market.

a) What is the bond's annualized YTM?
b) What is the bond's current yield?
c) What is the bond's capital gain or loss yield?
d) What is the bond's annualized YTC?
e) Is the YTC less than or more than the YTM? Why is this so?
f) What happens to the price of this bond if market interest rates rise?

Reference no: EM13333568

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