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Call Premium a 5

Question 87

Multiple Choice

Call Premium A 5.5 percent corporate coupon bond is callable in four years for a call premium of one year of coupon payments.Assuming a par value of $1,000,what is the price paid to the bondholder if the issuer calls the bond? (Assume annual interest payments.)


A) $55
B) $220
C) $1,000
D) $1,055

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