What is the bond annual yield-to-call

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Reference no: EM131306628

1. What is the market value of a 10-year maturity and $1,000 par value bond with a 9% coupon interest rate? Assume that the investor’s required rate of return from the bond is 13%. Assume that interest is paid semiannually.

$779.63

$908.08

$1,000

$1,105.84

2. A 10-year, 12% coupon, $1,000 par value bond is selling for $894.06 with a 14% annual yield. It can be called after 5 years at $1,120. What is the bond’s annual Yield-to-Call? Assume that the bond is paying semiannual interest.

18.66%

16.84%

11.2%

7.77%

Reference no: EM131306628

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