When a callable bond sells at a premium,the likelihood of a call is ________ and the yield to worst is the yield to ________.

Question

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callWhen a callable bond sells at a premium, it means the market interest rates have likely fallen since the bond was issued, making the existing bond's higher coupon rate attractive. Issuers are more likely to call the bond to refinance at a lower rate, so the likelihood of a call is high. The yield to worst in this scenario would be the yield to call, as it would be lower than the yield to maturity, reflecting the bond's early redemption at the call price rather than its maturity value.

When a Callable Bond Sells at a Premium,the Likelihood of a Call