The yield to call is a more conservative yield measure whenever the price of a callable bond is quoted at a value
A) Equal to or greater than par plus one year's interest.
B) Equal to par.
C) Equal to par less one year's interest.
D) Less than par.
E) Five percent over par.

Question

Quizplus · Accepted Answer

The yield to call is more conservative when the bond is priced at a premium (above par), as it assumes the bond will be called at the earliest opportunity, resulting in a shorter investment period and potentially lower yield compared to holding until maturity.

The Yield to Call Is a More Conservative Yield Measure