A callable bond has 15 years to maturity and can be called in 5 years. The...

A callable bond has 15 years to maturity and can be called in 5 years. The bond’s coupon rate is 12% with semi-annual coupon payments. The par value is $1000. If the bond is called, the call price will be $1100. The bond is currently selling for $985.35 What is the difference between its yield-to-call and yield-to-maturity?

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

As nothing was mentioned excel is used.

jeff jeffy answered 8 months ago

-A 15-year maturity, 8% coupon bond is callable in 5 years at a call price of...

-A 15-year maturity, 8% coupon bond is callable in 5 years at a call price of $1,050. The bond currently sells at yield to maturity of 7% a- What is the yield to call ? b- What is the yield to call if the call price is only $1000 c- What is the yield to call if the call price is $1050, but the bond can be called in 2 years instead of 5 ?

A Treasury bond with 5 years to maturity is currently quoted at 107:15. The bond has...

A Treasury bond with 5 years to maturity is currently quoted at 107:15. The bond has a coupon rate of 7.7 percent. What is the yield value of a 32nd for this bond? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

What is the modified duration of an 5% bond with 15 years to maturity that is...

What is the modified duration of an 5% bond with 15 years to maturity that is trading at a yield of 8%? Assume that coupon is paid semi-annually. (Keep your answer to 2 decimal places, xx.12.)

A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at a...

A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1100. The bond currently sells at a yield to maturity (YTM) of 7% (3.5% per half-year). What is the yield to call? How does it relate to the YTM? Why?

Consider a 5% callable bond with 20 years maturity and 8% yield which pays the face...

Consider a 5% callable bond with 20 years maturity and 8% yield which pays the face value plus 10% if it is redeemed before maturity. If after 10 years the bond is redeemed, find an upper bound for the yield at that time. Assume that coupon payments are made once per year.

A callable bond is the type of bond which can be redeemed before maturity by paying...

A callable bond is the type of bond which can be redeemed before maturity by paying extra redeem premium. The bond can be called by the issuer (company) when interest rate decreases. Gilt-Edged Bond is fixed income securities that are issued by the government of England. Because the bond is issued by the government, default risk on these bond is zero, and so it is considered as highly graded bond. Do you think it is a good idea to redeem...

B. A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at...

B. A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in 5 years at a call price of $1100. The bond currently sells at a yield to maturity (YTM) of 7% (3.5% per half-year). What is the yield to call? How does it relate to the YTM? Why?

A 6.35% coupon bond with 19 years left to maturity can be called in 11 years....

A 6.35% coupon bond with 19 years left to maturity can be called in 11 years. The call premium is 1 year of coupon payments, it is currently offered for sale at $964,000. What is the yield to maturity? (Assume interest payments are semiannual)

Suppose there is a Treasury bond with exactly 15 years left to maturity, a 5% coupon,...

Suppose there is a Treasury bond with exactly 15 years left to maturity, a 5% coupon, par of 100, and a 2.6% yield-to-maturity? (Recall that Treasury notes pay semi-annual coupons.) What is the modified duration of this bond? A 3.41 B 7.99 C 11.17 D 14.23

What can you say about the yield to maturity on a callable bond compared to an...

What can you say about the yield to maturity on a callable bond compared to an otherwise identical straight bond? Why?

Question