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| rev | Admin | (Created page with "'''Solution: C''' When the yield is 6.8% < 8%, the bond is sold at a premium and hence an early call is most disadvantageous. Therefore, When the yield is 8.8% > 8%, the bond is sold at discount. Hence, Q < 1000 < P. and thus Q = 1050.15 – 123.36 = 926.79. Also, because the bond is sold at a discount, the latest call is the most disadvantageous. Thus, <math display = "block"> \begin{array}{l l} {{926.79=40a_{\overline{2n}|0.044}+1000(1.044)^{-2n}=\frac{40}{0.044}+\l...") | Nov 19'23 at 19:12 | +711 |