A 15-year bond has a par value of $1,000 and a 10 percent semiannual coupon. (That is, the bond pays a coupon of $50 every six months.) The bond has a price of $1,190 and it is callable in 5 years at a call price of $1,050.
What is the semiannual coupon bond’s nominal yield to maturity (YTM)?
a. 6.37%
b. 6.73%
c. 7.60%
d. 7.83%
e. 8.25%
Answer: D
What is the semiannual coupon bond’s nominal yield to call (YTC)?
a. 6.37%
b. 6.73%
c. 7.60%
d. 7.83%
e. 8.25%
Answer: A
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