Question

Frank Corp. bonds have a market price of $1,250, a par value of $1,000, and have...

Frank Corp. bonds have a market price of $1,250, a par value of $1,000, and have 15 years to maturity. The bonds currently pay 10.5% annual in coupons. However, the bonds can be called in 5 years at $1,100. Will the bonds be called?

a.

No, because the YTC is 6.28% which is greater than the YTM.
b.

None of the above.
c.

No, because the YTC is 6.28% which is less than the YTM.
d.

Yes, because the YTC is 6.28% which is less than the YTM.
e.

Yes, because the YTC is 6.28% which is greater than the YTM.
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