Paradise adventures issued 7 coupon bonds with a maturity


Question: Paradise Adventures issued 7% coupon bonds with a maturity of twenty years five years ago. The bonds are callable beginning 10 years prior to maturity at 103% of par value. The bonds are currently priced at 99.25% of par. Coupons are paid semiannually and the face value is $1,000.

(1) What is the YTM?

(2) What is the YTC?

(3) Which is the relevant yield for an investor?

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Finance Basics: Paradise adventures issued 7 coupon bonds with a maturity
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