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Keenan Industries Has a Bond Outstanding with 15 Years to Maturity,an

Question 2

Multiple Choice

Keenan Industries has a bond outstanding with 15 years to maturity,an 8.25% nominal coupon,semiannual payments,and a $1,000 par value.The bond has a 6.50% nominal yield to maturity,but it can be called in 6 years at a price of $1,120.What is the bond's nominal yield to call?


A) 6.20%
B) 6.53%
C) 6.85%
D) 7.20%
E) 7.55%

Correct Answer:

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