1 a noncallable treasury bond has a quoted yield of 498, Ask an Expert

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1. A noncallable Treasury bond has a quoted yield of 4.98 percent. It has a 5.95 percent coupon and 9 years to maturity.

2. We have a preferred stock which pays $ 6 per year. When we buy it, the cops is 6%. we keep it for 12 years and then sell it. At that time, cops drops to 2%. What is the pric we sell it at? If the stock is called after 3 years at 110%, if the cops is 1%, what is the price?

3. A bond sells for $500 and it pays $100 per annum till its maturity 28 years from now The firm, however, may call it back after 3 years at $1300. Derive its ytm and its call rate. Compare the ytm and the call rate. Are they reasonable? Why, or why not? Which the two does an investor make?

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Financial Management, Finance

Category:- Financial Management
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