Foxtrot Capital issued 4% per annum bonds on 17 July 2010 that mature on 17 July 2032. The par value of each bond is $1,000, with interest being paid, and compounded, annually. The bonds are callable on 17 July 2025 at 110% of par value. Due to the risk profile of Foxtrot Capital, investors required a 4.5% per annum rate of return when these bonds were first issued.

Required:

a) Determine the yield to call of Foxtrot Capitals bonds when they were first issued, assuming they were originally issued for $965 each.

b) Determine the coupon yield of Foxtrot Capitals bonds when they were first issued.

c) Nine years after issuance, Foxtrot Capitals bonds are trading at a value of $914.25. If investors now require a return of 5.5% on investments of this perceived risk level, should you buy these bonds as of 17 July 2019? In your answer, please ensure you explain in one sentence why you believe these bonds will be called or not.

Thank you.