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1. It is now Jane 1, 2020, and you are considering the purchase of an outstanding bond that was issued on June 1, 2018. It

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1. It is now Jane 1, 2020, and you are considering the purchase of an outstanding bond that was issued on June 1, 2018. It has an 6% annual coupon and had a 20-year original maturity. (It matures on June 1, 2038.) There is 5 years of call protection (until November 1, 2025), after which time it can be called at 108that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 119.12% of par, or $1,191.20. a. What is the yield to maturity? What is the yield to call? b. If you bought this bond, which yield would you more likely to earn? Explain your reasoning. c. Calculate this bond current yield and capital gain yield

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