James Co., LTD decided to take a loan that would be used to finance one of its rescue-the-world missions. It will raise the necessary funds by selling 8 percent coupon bonds with $1,000 face value. These bonds will have 12years to maturity and make semiannual payments. The corporation believes it can sell each bond for $870.

Calculate the following:

(a) The yield to maturity (YTM) for these bonds is [ Select ] ["4.94%", "5.32%", "6.00%", "7.12%", "7.45%", "9.87%"] . Increase decimal places!

(b) The effective annual yield to maturity (EAR) for these bonds is [ Select ] ["5.39%", "6.09%", "7.25%", "7.59%", "9.87%", "10.12%"] .