Last year Carson Industries issued a $10-$year, $13\%$ semlannual coupon bond at its par value of $$1,000.$ Currently, the bond can be called in $6$ years at a price of $$1,065$ and it sells for $$1,200.$

a$.$ What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places.

$$TM: $\%$

YTC: $\%$

Would an investor be more likely to earn the YTM or the YTC$?$

b$.$ What is the current yield? $($Hint: Refer to Footnote $6$ for the definition of the current yield and to Table $7\mathrm{.}1)$ Round your answer to two decimal places. $\%$

Is this yield affected by whether the bond is likely to be called?

I. If the bond is called, the capital gains yleld will remain the same but the current yield will be different.

II$.$ If the bond is called, the current yield and the capital gains yield will both be different.

III. If the bond is called, the current yield and the capital gains yield will remain the same but the $$upon rate will be different.

IV$.$ If the bond is called, the current yield will remain the same but the capital gains yield will be difierent.

V$.$ If the bond is called, the current yield and the capital gains yield will remain the same.

c$.$ What is the expected capital gains $($or loss$)$ yield for the coming year? Use amounts calculated in above requirements for calculation, if required. Negative value should be indicated by a minus sign. Round your answer to two decimal places.

$\%$

Is this yield dependent on whether the bond is expected to be called?