Part A:

Joe's outstanding bonds have a $1,000 par value, and they mature in 25 years. Their coupon rate is 9.25%, they pay interest semiannually, and they sell at a price of $975. What is the bond's nominal yield? (Hint: find the semiannual yield and multiply by two to find the nominal yield).

a. 7.32%

b. 7.71%

c. 8.12%

d. 8.54%

e. 9.51%

PART B-

Joe Inc.'s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call?

a. 6.63%

b. 6.98%

c. 7.35%

d. 7.74%

e. 8.12%

Please show how you got these answers. Thanks so much!