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Assume that an investor is looking at two bonds: Bond A is a 15-year, 12% (semiannual pay) bond that is priced to yield 12.5%. Bond
Assume that an investor is looking at two bonds: Bond A is a 15-year, 12% (semiannual pay) bond that is priced to yield 12.5%. Bond B is a 15-year, 11% (annual pay) bond that is priced to yield 10%. Both bonds carry 7-year call deferments and call prices (in 7 years) of $1,065. a. Which bond has the higher current yield? b. Which hond has the higher YTM? c. Which bond has the higher YTC? a. The current yield of Bond Ais % (Round to two decimal places.) The current yield of Bond Bis. (Round to two decimal places.) Which bond has the higher current yield? (Select the best answer below.) O A. Bond A has a higher current yield of 12.42% B. Bond B has a higher current yield of 12.42% b. The YTM of Bond Ais (Round to two decimal places.) The YTM of Bond B is %. (Round to two decimal places.) Which bond has the higher YTM? (Select the best answer below. O A. Bond B has a higher YTM of 12.5% O B. Bond A has a higher YTM ol 12.5% c. The YTC of Bond Ais %. (Round to two decimal places.) The YTC of Bond B is %. (Round to two decimal places.) Which bond has the higher YTC? (Select the best anawer below.) A Rond A has a higher YTC of 13 34% Click to select your answer(s)
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