1. A $1,000 par, semiannual bond is first callable in 5 years at 108% of par. The bond pays an 8% coupon and exactly 15 years remaining until maturity.
If an investor pays $895 for the bond, the bond’s yield to first call is closest to:
A 4.65%.
B 6.03%.
C 9.31%.
D 12.07%.
2. An analyst observes a 4-year, $1,000 par, semiannual-paying corporate bond with a coupon rate of 7.125% and currently priced at 102.347% of par. The bond is callable at 101% of par in two years and also putable at par in two years.
The bond’s yield to put is closest to:
A 2.932%.
B 4.225%.
C 5.864%.
D 6.450%.