Answer:
Yield to call is 6.23%
Explanation:
The Actual rate of return that a bond has until the call of the bond is called yield to call. Zero coupon bond does not offer any coupon payment.
Yield to call = [( CP - MV ) / n ] / [ (CP + MV ) / 2 ]
CP = Call price = $620
MV = Market Value = $453
n = number of years to call = 5 years
Yield to call = [( 620 - 453 ) / 5 ] / [ ( 620 + 453 ) / 2 ]
Yield to call = 33.4 / 536.5 = 0.0623 = 6.23%
