A 10% coupon bond has 15 years to maturity and could be called in 2 years. If the bond is called, investors will earn 4%. The call premium is one year of coupon payments. If coupon payments are made annually and par value is $1,000, what is the bond's yield to maturity?
A) 6.19%
B) 6.82%
C) 7.65%
D) 7.98%
Correct Answer:
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