Answer:
The yield to call annually is 6.86%
Explanation:
The yield to call can be can be calculated using the rate formula in excel
=rate(nper,pmt,-pv,fv)
nper is the period to call, which is calculated 5 years the year of call multiplied by 2 as the coupon is paid twice a year that is 10
pmt is the semi-annual coupon payable by th bond, $1000*9%*6/12=$45
pv is the current price of the bond =coupon interest yearly/annual yield
coupon interest is $1000*9%=$90
annual yield is 8%
pv=90/8%=$1,125
fv is the call price at $1050
yield to call=rate(10,45,-1125,1050)
=3.43%
annual yield to call=3.43%*2
=6.86%
