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Level I
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Fixed Income
Fixed Income
Medium
Ridgemont Municipal Authority issues a 10-year, 5% coupon bond callable at par after Year 5. The bond's Z-spread is 120 bps and its OAS is 85 bps. The cost of the embedded call option is closest to:
A
35 bps
B
85 bps
C
120 bps
D
205 bps
Select an answer to continue
Tags
#callable-bonds
#oas
#z-spread
#option-cost
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