?A(n) 10.0?%, 25-year bond has a par value of? $1,000 and a callprice of $1,125. (The bond's first call date is in 5? years.)Coupon payments are made semiannually? (so use semiannualcompounding where? appropriate).
- Find the current? yield, YTM, and YTC on this? issue, giventhat it is currently being priced in the market at $1,250. Which ofthese 3 yields is the? highest? Which is the? lowest? Which yieldwould you use to value this? bond? Explain.
- Repeat the 3 calculations? above, given that the bond is beingpriced at $900 Now which yield is the? highest? Which is the?lowest? Which yield would you use to value this? bond?Explain.
- If the bond is priced at $1,250?, the current yield is ___?%.(Round to two decimal? places.)
The annual? yield-to-maturity with semiannual compounding is___?%. (Round to two decimal? places.)
The annual? yield-to-call with semiannual compounding is ___?%.(Round to two decimal? places.)
Which of these 3 yields is the? highest? Which is the?lowest????(Select from the? drop-down menus.)
Yield-to-call OrYield-to-maturity Or Currentyield is the? highest, while
Yield-to-maturity oryield-to-call or current yield is thelowest.
Which yield would you use to value this? bond????(Select thebest answer? below.)
A. The? yield-to-maturity because the bonds may not becalled.
B. It? doesn't matter which yield you use.
C. The? yield-to-call because convention is to use the lowermore conservative measure of yield.
D. The? yield-to-maturity is always used.
b. If the bond is priced at $900 the currentyield is ____?%. (Round to two decimal? places.)
The annual? yield-to-maturity with semiannual compounding is___?%. (Round to two decimal? places.)
The annual? yield-to-call with semiannual compounding is ___?%.(Round to two decimal? places.)
Which of these 3 yields is the? highest? Which is the?lowest????(Select from the? drop-down menus.)
?
Yield-to-maturity orYield-to-call or Currentyield is the? highest, while
Yield-to-call or current yieldor yield-to-maturity is thelowest.
Which yield would you use to value this? bond?(Select the bestanswer? below.)
A The? yield-to-maturity because convention is to use the lowerof? yield-to-maturity or? yield-to-call for bonds selling at adiscount.
B. The? yield-to-maturity is always used.
C. It? doesn't matter which yield you use.
D. The? yield-to-maturity because the bonds may not becalled.
