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1 . Consider two $ 1 0 , 0 0 0 face - value corporate bonds.One is currently selling for $ 9 , 9 8

1. Consider two $10,000 face-value corporate bonds.One is currently selling for $9,980 and matures in 15 years. The other bond sells for $9,350 and matures in 3 years. Calculate the current yield for both bonds if both have a coupon rate equal to 5%. Which current yield is a better approximation of the vield to matu-rity? (Assume a yearly coupon payment.)

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