Please only correct. A callable bond has a yield to call (YTC) of 5%, and a non-callable bond has a yield tomaturity (YTM) of 4%. Which bond is likely to have a higher duration?bCdThe callable bondThe non-callable bond.Both bonds will have the same durationCannot be determined without more information.

When a company provides a debt security bond with an additional feature that allows it to redeem it…

A callable bond has a yield to call (YTC) of 5%, and a non-callable bond has a yield to maturity (YTM) of 4%. Which bond is likely to have a higher duration? a C d The callable bond. The non-callable bond. Both bonds will have the same duration. Cannot be determined without more information.

A callable bond has a yield to call (YTC) of 5%, and a non-callable bond has a yield to maturity (YTM) of 4%. Which bond is likely to have a higher duration? a C d The callable bond. The non-callable bond. Both bonds will have the same duration. Cannot be determined without more information.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter14: Investing In Stocks And Bonds

Section14.5: Investing In Bonds

Problem 6CC

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

Please only correct.

A callable bond has a yield to call (YTC) of 5%, and a non-callable bond has a yield to
maturity (YTM) of 4%. Which bond is likely to have a higher duration?
b
C
d
The callable bond
The non-callable bond.
Both bonds will have the same duration
Cannot be determined without more information.

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