McCue Inc.'s bonds currently sell for $1,170. They pay a $118 annual coupon,

have a 25-year maturity, and a $1,000 par value, but they can be called in 1

years at $1,118. Assume that no costs other than the call premium would be

incurred to call and refund the bonds, and also assume that the yield curve is

horizontal, with rates expected to remain at current levels on into the future.

What is the difference between this bond's YTM and its YTC? (Subtract the YTC

from the YTM; it is possible to get a negative answer.)

4.30%

4.50%

4.70%

4.90%

5.10%