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Management · Q240

International Finance and Treasury

Graduate and Post Graduate · Management · question 240

Q240

Face value of bond is 450 and call price of bond is 250 then value of call premium is

A.
1.80%
B.
$200
Answer
C.
$700
D.
$1.80

Answer: Option B

Solution

Answer: Option B
Solution:
Value of call premium = Face value of bond - Call price of bond
= 250 = $200.
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