A friend of yours just invested in an outstanding bond with a 5% annual coupon and a remaining maturity of 10 years. The bond has a par value of RM1,000 and the yield to maturity is 7%.   1. Assuming the bond in ‘question is RM 1,100.55’ and is callable in 7 years at the price of RM1,015. What is the bond’s yield-to-call (YTC)?   2.If the bond in ‘question ’ is a quarter-annual coupon bond, what is the price of the bond today?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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A friend of yours just invested in an outstanding bond with a 5% annual coupon and a remaining maturity of 10 years. The bond has a par value of RM1,000 and the yield to maturity is 7%.

 

1. Assuming the bond in ‘question is RM 1,100.55’ and is callable in 7 years at the price of RM1,015. What is the bond’s yield-to-call (YTC)?

 

2.If the bond in ‘question ’ is a quarter-annual coupon bond, what is the price of the bond today?

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