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2006-09-21 07:07:17 · 1 answers · asked by tau1616 1 in Business & Finance Personal Finance

1 answers

The formula to price a callable bond is:
http://classes.bus.oregonstate.edu/ba442/CJed3.Chapter10.ppt

In the formula, C is the annual coupon (in $), CP is the call price of the bond, T is the time (in years) to the earliest possible call date, and YTC is the yield to call, with semi-annual coupons.

As with straight bonds, we can solve for the YTC, if we know the price of a callable bond.

2006-09-21 07:08:45 · answer #1 · answered by god knows and sees else Yahoo 6 · 0 0

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