All else the same, for a callable bond, an increase in the call premium will ________ the yield to call.

Name: All else the same, for a callable bond, an increase in the call premium will ________ the yield to call.
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Question

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An increase in the call premium makes the bond more attractive to investors because they receive more money if the bond is called. This attractiveness leads to a lower yield to call as investors are willing to accept a lower return for the higher call premium.

All Else the Same, for a Callable Bond, an Increase