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It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has

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It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has a 7.5% annual coupon and had a 30-year original maturity. (It matures on December 31, 2045.) There is 5 years of call protection (until December 31, 2020), after which time it can be called at 109-that is, at 109% of par, or $1,090. Interest rates have declined since it was issued, and it is now selling at 119.575% of par, or $1,195.75. a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. 6.90 % What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. 4.28 %

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