1. When would it make sense for a firm to call a bond issue?
A) when the market price of the bond is less than the call price, and market interest rates are less than the bond's coupon rate
B) when the market price of the bond exceeds the call price, and market interest rates are greater than the bond's coupon rate
C) when the market price of the bond is less than the call price, and market interest rates are greater than the bond's coupon rate
D) when the market price of the bond exceeds the call price, and market interest rates are less than the bond's coupon rate Save
2. Company issues a callable (at par) ten-year, 6% coupon bond with annual coupon payments. The bond can be called at par in one year after release or any time after that on a coupon payment date. On release, it has a price of $104 per $100 of face value. What is the yield to call of this bond when it is released?
A) 0.60%
B) 1.50%
C) 5.47%
D) 1.92%