A bond sells for 1500 and it pays 100 per annum till its


A bond sells for $1500 and it pays $100 per annum till its maturity 18 years from now. The firm, however, may call it back after 3 years at $1100. Derive its ytm and its call rate. Compare the ytm and the call rate. Are they reasonable? Why, or why not? Which of the two does an investor make?

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Financial Management: A bond sells for 1500 and it pays 100 per annum till its
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