3. Pybus, Inc. is considering issuing bonds that will mature in 24 years with an annual coupon rate of 9 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 9.5 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 10.5 percent. What will be the price of these bonds if they receive either an A or a AA rating?

4. The market price is $825 for a 12-year bond ($1,000 par value) that pays 12 percent annual interest, but makes interest payments on a semiannual basis (6 percent semiannually). What is the bond's yield to maturity?