Masters Corp. issues two bonds with 18-year maturities. Both bonds are callable at $1,065. The first bond is issued at a deep discount with a coupon rate of 7% to yield 12.5%. The second bond is issued at par value with a coupon rate of 13.50%. a. What is the yield to maturity of the par bond? (Round your answer to 2 decimal places.) Yield to maturity b. If you expect rates to fall substantially in the next two years, which bond would you prefer to hold? Bond with a coupon rate 7% O Bond with a coupon rate 13.50%