Currently, Bruner Ine.'s bonds sell for $1,050. They pay a $82 annual coupon, have a 12-year maturity, and a $1,000 par value, but they can be called in 7 years at $1,150. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between this bond's YTM and its YTC? (Subtract the YTC from the YTM.) 2.14% 1.30% 2.42% 1.21% 1.85% Joel Foster is the portfolio manager of the SF Fund, a S10 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 4.00%. What rate of return should investors expect (and require) on this fund? 11.03% 10.21% 10.44% 10.56% 10.78%