Bill Board must choose between two bonds:

Bond A pays $$80$ annual interest with semiannual payment and has a market value of $$890.$ It has $12$ years to maturity.

Bond B pays $$70$ annual interest with semiannual payment and has a market value of $$940.$ It has $2$ years to maturity.

Assume the par value of the bonds is $$1,000.$

a$.$ Compute the current yield on both bonds. $($Round the final answers to $2$ decimal places.$)$

Current yield

Bond A

$8\mathrm{.}99$

$\%$

Bond B

$7\mathrm{.}45$

$\%$

b$.$ Which bond should he select based on the answer to part a$?$

multiple choice $1$

Bond A

Bond B

c$.$ A drawback of current yield is that it does not consider the total life of the bond. What is the yield to maturity on these bonds? $($Do not round intermediate calculations. Round the final answers to $2$ decimal places.$)$

Yield to maturity

Bond A

$\%$

Bond B

$\%$

d$.$ Has the answer changed between parts b and c of this question?

multiple choice $2$

Yes

No