Question

McCue Incis bonds currently sell for $1,100. They pay a $90 annual coupon, have a 25-year...

McCue Incis bonds currently sell for $1,100. They pay a $90 annual coupon, have a 25-year maturity, and al $1,000 par value, but they can be called in 5 years at $1,050. Assume that interest rates expected te remain at curent levels on into the future. What is the difference between these bonds' YTMs and YIC
0.99%
1.11%
0.66%
0.77%
0.88%

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Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

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