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? YTM:

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.