Question

A callable bond pays annual interest of $60, has a par value of $1,000, matures in 20 years but is callable in 10 years at a price of $1,100, and has a value today of $1055.84.The yield to call on this bond is __________.A) 6.00%B) 6.58%C) 7.20%D) 8.00%

Answer 1

a. 6%

Calculator entries are N = 10, PV = -1,055.84, PMT = 60, FV = 1,100, CPT I/Y 6