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Management · Q287

International Finance and Treasury

Graduate and Post Graduate · Management · question 287

Q287

Face value of bond is 550 and call price of bond is 475 then value of call premium is

A.
$1.16
B.
$1,025
C.
$75
Answer
D.
1.16%

Answer: Option C

Solution

Answer: Option C
Solution:
Value of call premium = Face value of bond - Call price of bond
= 475 = $75.
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