(YTM and yield to first call semi-annual payments) On 15 May 1985, the U.S. Treasury issued a bond maturing on 15 November 2014. The bond had a coupon rate of 11.75%, payable semi-annually on 15 November and 15 May.

On 23 January 2005, a $1,000 face-value bond was selling for $1,356.20.

This price does not include the accrued interest. The bond is callable at par starting 15 November 2009. Compute:

a. The bond’s yield to maturity.

b. The bond’s yield to first call.