Explore BrainMass

Explore BrainMass

    Between planes -- need quick response

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Which answer is correct and why?

    A 10-year bond has a 10% annual coupon rate and a yield to maturity of 12%. This bond can be called in 5 years at a call price of $1,050; the bond's par value is $1,000.

    Which one of the following statements is most correct?

    a. The bond's current yield is greater than 10%.

    b. The bond's yield to call is less than 12%.

    c. The bond is selling at a price below par.

    d. Both choices a and c above are correct.

    e. None of the above answers is correct.

    © BrainMass Inc. brainmass.com October 7, 2022, 8:05 am ad1c9bdddf