17. Problem 7.12 (Yield To Call) eBook It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 9.5% annual coupon and had a 30-year original maturity. (It matures on December 31, 2048.) There is 5 years of call protection (until December 31, 2023), after which time it can be called at 100-that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it now selling at 120.00% of par, or $1,200.00. a. What is the yield to maturity? Do not round intermediate calculations, Round your answer to two decimal places. What is the yield to call? Do not round intermediate calculations. Round your answer to two decomal places. b. If you bought this bond, which return would you actually earn? 1. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. II. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. III. Investors would expect the bonds to be called and to earn the VTC because the YTC is greater than the YTM. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTH is greater than the VTC. Selec c. Suppose the bond had been seting at a discount rather than a premium. Would the yield to maturity have been the most likely return, or would the yield to call have been most likely? 1. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the VTC Sele II. Investors would expect the bonds to be called and to earn the VTC because the VTC is greater than the YTH. III Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTH. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC