A 12-year, $1,000 face value bond has an 8 percent semiannual coupon and a nominal yield to maturity of 6 percent. The bond is callable in 5 years at a call price of $1,040. What is the bond’s nominal yield to call?
a. 1.76%
b. 8.27%
c. 4.86%
d. 3.52%
e. 5.22%
Answer: C
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