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Suppose You Have a 10 Percent, 20-Year Bond Traded at $1,120

Question 81

Multiple Choice

Suppose you have a 10 percent, 20-year bond traded at $1,120. If it is callable in 5 years at $1,150, what is the bond's approximate yield to call? Interest is paid quarterly.


A) 7.78 percent
B) 8.00 percent
C) 9.40 percent
D) 9.36 percent
E) 9.72 percent

Correct Answer:

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