Consider the case of RTE Inc.: RTE 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 $1,190.35. However, RTE 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 RTE Inc.s bonds? Value YTM = ? YTC =?

If interest rates are expected to remain constant, what is the best estimate of the remaining life left for RTE Inc.s bonds? 18 years 13 years 8 years 10 years

If RTE Inc. issued new bonds today, what coupon rate must the bonds have to be issued at par?