Assume today is 09/02/2016

CashDrain.com has bonds outstanding that mature on your birthday, 2024. These bonds have a 5% coupon rate, with coupons paid semi-annually, and are currently quoted at 94.426.

CashCow.com has bonds outstanding that mature on your birthday, 2024. These bonds have a 7% coupon rate, with coupons paid semi-annually, and are currently quoted at 102.891.

Assume both bonds are callable at face value beginning 5 years before maturity.

1. Calculate the YTM and the YTC for each bond

1. Highlight the yield that would be more relevant for each of the two bonds yield to maturity or yield to call.

2. For each, explain why that yield is the relevant one.