Consider a semi-annual bond with an annual coupon = 1.85%, maturity = 8years, par value = $1,000, and a market price today = $633

a.What is its yield to maturity (YTM)?

b.Suppose the bond can be called at $750 at the end of year 5, what is its yield to call?

IMPORTANT: SHOW FORMULAS USED TO CALCULATE

A B 1 a b 2 3 4 5 6 7 8 9 10 11 12 13 Coupon Par YTM Start 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 14 15 16 17 18 19 20 21 8.0 A B 1 a b 2 3 4 5 6 7 8 9 10 11 12 13 Coupon Par YTM Start 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 14 15 16 17 18 19 20 21 8.0