#4

b. Which bond should he select based on yl allsel to Pat c. A drawback of current yield is that it does not consider the total life of the bond. For example, the yield to maturity on Bond X is 11.21 percent. What is the yield to maturity on Bond Z? d. Has your answer changed between parts b and c of this question? 4. An investor must choose between two bonds: Bond A pays $72 annual interest Bond (LOI and has a market value of $925. It has 10 years to maturity. Bond B pays $62 annual interest and has a market value of $910. It has two years to maturity. Assume the par value of the bonds is $1,000. a. Compute the current yield on both bonds. b. Which bond should she select based on your answer to part a? C. A drawback of current yield is that it does not consider the total life of the bond. For example, the yield to maturity on Bond A is 8.33 percent. What is the yield to maturity on Bond B? Has your answer changed between parts b and c of this question in terms of which bond to select? d