Gold Inc.'s $1,000 face value bonds mature in 24 years and currently sell for $1,025.00....
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Gold Inc.'s $1,000 face value bonds mature in 24 years and currently sell for $1,025.00. They pay an annual coupon of $85.00 and can be called in 6 years for a price of $1,085.00. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between this bond's YTM and its YTC? (Subtract the YTC from the YTM; it is possible to get a negative answer.)
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