Consider the case of Demed Inc.: Demed Inc. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,040.35. However, Demed Inc. may call the bonds in eight years at a call price of $1,060. What are the YTM and the yield to call (YTC) on Demed Inc.s bonds?

Value

YTM_____ (9.89%, 6.47%, 7.83%, OR 8.55%)

YTC_____ (7.93, 6.47, 8.82, or 7.36%)

If interest rates are expected to remain constant, what is the best estimate of the remaining life left for Demed Inc.s bonds? 18 years 10 years 5 years 8 years

If Demed Inc. issued new bonds today, the coupon rate must ______ be for the bonds have to be issued at par.