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CAN YOU PLEASE ANSWER THIS QUESTION THANK YOU A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 8%

image text in transcribedCAN YOU PLEASE ANSWER THIS QUESTION THANK YOU

A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 6 years at $1,068.03, and currently sell at a price of $1,127.59. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC: What return should investors expect to earn on these bonds? I. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. II. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. III. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. -Select- 7 Ten years ago the Templeton Company issued 19-year bonds with a 9% annual coupon rate at their $1,000 par value. The bonds had a 6% call premium, with 5 years of call protection. Today Templeton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places. Why should or should not the investor be happy that Templeton called them? I. Investors should be happy. Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YTM. If investors wish to reinvest their interest receipts, they can now do so at higher interest rates. II. Investors should be happy. Since the bonds have been called, investors will receive a call premium and can declare a capital gain on their tax returns. III. Investors should be happy. Since the bonds have been called, investors will no longer need to consider reinvestment rate risk. IV. Investors should not be happy. Since the bonds have been called, interest rates must have fallen sufficiently such that the YTC is less than the YTM. If investors wish to reinvest their interest receipts, they must do so at lower interest rates. -Select

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