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A 30-Year Bond with an 8 Percent Coupon Has a Yield

Question 13

Multiple Choice

A 30-year bond with an 8 percent coupon has a yield to maturity of 6 percent. The bond could be called in seven years and if called would generate a yield to call of 5.75 percent. What is this bond's call premium? Assume the coupon payments are made annually and par value is $1,000.


A) $219.73
B) $152.64
C) $106.29
D) $301.76

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