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On Feb 5 of this year, I bought five of someone's 5's of '22 at par in an effort to park some cash. However, Fido just informed me the bond is being fully called May 14 of this year at 105.14. That bumps my theoretical YTM to a whopping 23.7%, which sounds good, but really isn't. What might be a more realistic YTM? Let's assume I had been able to park the money until the bond's due date of 10/15/22. My holding-period would have been 1.69 years, right? and coupons rec'd would total $422.50. Now, my gain is $67.50 in coupons and a $257 call prem, for a $324.5 total. So the call imposes an opportunity cost, even if $37.33 is added by parking the money in a CD for the balance of the term at the current rates for such things. The issuer benefited from the call. I didn't.
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