Yield to Call a 7

Yield to Call A 7.25 percent coupon bond with 25 years left to maturity can be called in 5 years. The call premium is one year of coupon payments. It is offered for sale at $1066.24. What is the yield to call of the bond? (Assume that interest payments are paid semi-annually and par value is $1,000.)

A) 3.41%
B) 3.45%
C) 3.51%
D) 6.90%

Correct Answer:

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