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Examveda

Value of option issued to call debt is $780 and return rate on callable bond is $370 then return rate on non-callable bond is

A. $1,250

B. $1,150

C. $1,350

D. $410

Answer: Option D

Solution(By Examveda Team)

Non-callable bond = Value of option issued to call debt - Return rate on callable bond
= $780 - $370 = $410.

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