A 10-year bond sells for $1,075. The bond has a 9 percent semiannual coupon and a face value of $1,000. (That is, the bond pays a $45 coupon every six months.) The bond is callable in 5 years and the call price is $1,035. What is the bond’s nominal yield to call?
a. 7.19%
b. 7.75%
c. 7.90%
d. 8.00%
e. 8.13%
Answer: B
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