SIE practice questionhardYield Calculations - YTC
A 20-year 6% bond is callable in 10 years at 105 and is trading at 108. Which yield is the lowest?
- AYield to maturity
- BYield to call✓ Correct answer
- CCurrent yield
- DCoupon rate
Explanation
Why B — Yield to call
At a premium, yield to call is lowest because the premium is lost sooner. YTM is higher with a longer holding period; current yield and coupon are both higher figures.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Debt Securities questions
- A corporation issues a 10-year bond with a 5% coupon, payable semiannually. Which of the following best describes this…
- A major difference between GO and revenue municipal bonds is:
- Which municipal bond is primarily backed by the taxing power of the issuer?
- A convertible bond is trading above parity. What does this mean for arbitrageurs?
- Which U.S. Treasury security is always issued at a discount and matures in one year or less?
- A 6% corporate bond makes interest payments on Feb 1 and Aug 1. If a customer buys the bond on May 10, how much accrued…
- A bond rated 'BBB' by Standard & Poor's is considered:
- Which bond type has the highest duration, assuming equal maturities?