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Management · Q152

International Finance and Treasury

Graduate and Post Graduate · Management · question 152

Q152

Face value of bond is 685 and call price of bond is 378 then value of call premium is

A.
$307
Answer
B.
$1,063
C.
$2,063
D.
$3,063

Answer: Option A

Solution

Answer: Option A
Solution:
Value of call premium = Face value of bond - Call price of bond
= 378 = $307.
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