Given the information below, which bond is the better purchase for investors? Why do you feel it is the better purchase? Explain your answer.

Bond #1 is a 10 year, 4.5% semiannual coupon bond. It has a par/face value of $5,000 and may be called in 6 years at a call price of $7,500. The bond sells for $5,250.

Bond Information		Periodic Yield to Maturity = 1.95%
Years to maturity:	10	Annual Yield to Maturity = 3.89%
Periods per year:	2	Annual Coupon Rate = $225.00
Periods to maturity:	20	Current yield = 4.29%
Coupon rate:	4.5%	Periodic Yield to Call = 4.86%
Par/face value:	$5,000	Annual Yield to Call = 9.72%
Periodic payment:	$112.50
Current price	$5,250
Call price:	$7,500
Years till callable:	6
Periods till callable:	12

Bond #2 is a 30 year, 6.25% semiannual coupon bond. It has a par/face value of $3,000 and may be called in 10 years at a call price of $7,500. The bond sells for $3,000.

Bond Information		Periodic Yield to Maturity = 3.13%
Years to maturity:	30	Annual Yield to Maturity = 6.25%
Periods per year:	2	Annual Coupon Rate = $187.50
Periods to maturity:	60	Current yield = 6.25%
Coupon rate:	6.25%	Periodic Yield to Call = 6.85%
Par/face value:	$3,000	Annual Yield to Call = 13.69%
Periodic payment:	$93.75
Current price	$3,000
Call price:	$7,500
Years till callable:	10
Periods till callable:	20