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A 15-Year Bond with a 10 Percent Coupon Has a Yield

Question 125

Multiple Choice

A 15-year bond with a 10 percent coupon has a yield to maturity of 8 percent. The bond could be called in four years and if called would generate a yield to call of 6 percent. What is this bond's call premium? Assume the coupon payments are made semiannually and par value is $1,000.


A) $19.73
B) $81.87
C) $41.20
D) $66.03

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