Matteo Toys has bonds outstanding that have a 9 percent annual coupon and a face value of $1,000. The bonds will mature in 10 years, although they can be called before maturity at a call price of $1,050. The bonds have a yield to call of 6.5 percent and a yield to maturity of 7.4 percent. How long until these bonds may first be called?

Matteo Toys has bonds outstanding that have a 9 percent annual coupon and a face value of $1,000. The bonds will mature in 10 years, although they can be called before maturity at a call price of $1,050. The bonds have a yield to call of 6.5 percent and a yield to maturity of 7.4 percent. How long until these bonds may first be called?

Matteo Toys has bonds outstanding that have a 9 percent annual coupon and a face value of $1,000.  The bonds will mature in 10 years, although they can be called before maturity at a call price of $1,050.  The bonds have a yield to call of 6.5 percent and a yield to maturity of 7.4 percent.  How long until these bonds may first be called?






a. 2.21 years
b. 3.16 years
c. 3.68 years
d. 5.37 years
e. 6.32 years









Answer: B


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