Harold Reese must choose between two bonds: Bond X pays $95 annual interest and has a market value of $900. It has 10 years to maturity. Bond Z pays $95 annual interest and has a market value of $920. It has two years to maturity.

a. Compute the current yield to both bonds.

b. Which bond should he select based on your answer in part A?

c. A drawback of current yield is that it does not consider the total life of the bond. What is the yield to maturity on bond Z.?

d. Has your answer changed between parts b and c of this question?