Question

Assume that an investor is looking at two​ bonds: Bond A is a 20​-year, 9% ​(semiannual pay) bond that is priced to yield 10.5%. Bond B is a 20​-year, 8​% ​(annual pay) bond that is priced to yield 7.5​%. Both bonds carry 5​-year call deferments and call prices​ (in 5 ​years) of ​$1,050. Which bond has the higher current yield?​

Answer 1

Answer:

Bond A has the higher current yield