A 10% coupon bond with annual payments and 10 years to maturity is callable in three years at a call price of $1,100. If the bond is selling today for $975, the yield to call is

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The yield to call is calculated based on the bond being called at the earliest opportunity, which is in three years at the call price of $1,100. Given the bond's current price of $975, the yield to call is higher than the coupon rate due to the bond being sold at a discount and the call price being above par. Calculating the yield to call using these parameters results in approximately 13.98%.

A 10% Coupon Bond with Annual Payments and 10 Years