A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 8%0 semiannual coupon, are callable in 6 years at $1,062,57, and currently sell ot a price of $1,118.87. What are their nominal yleld to moturity and their nominal yield to call? Do not round intermediote calculations. Round your answers to two decimal places. TM: YTC: What return should investors expect to eam on these bonds? 1. Investors would not expect the bonds to be called and to eam the YTM because the YTM is greater than the YTC: It. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. III. Invertors would expect the bonds to be called and to earn the rTe because the YTC is less than the YTM. IV. Investors would expect the bonds to be called and to earn the YTC because the rTc is greater than the YTM. In investor has two bonds in his portfollo that have a face value of $1,000 and pay an 11%6 annual coupon. Bond L matures in 12 years, while Bond 5 natures in 1 year. a. What will the value of the Bond L be if the going interest rate is 6%,8%, and 1296 ? Assume that only one more interest payment is to be made on Bond S at its maturity and that 12 more payments are to be made on Bond L. Round your answers to the nearest cent. b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? 1. The change in price due to a change in the requiled rate of return increases as a bond's maturity decreases. II. Long-term bonds have greater interest rate risk than do short-term bonds. III. The change in price due to a change in the required rate of roturn decreases as a bond's maturity increases. IV. Long-term bonds have lower interest rate risk than do short-term bonds. V. Long-term bonds have lower reinvestment rate risk than do short-term bonds