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please answer both A bond has a $1,000 par value, 8 years to maturity, and a 7% annual coupon and selts for $980. a. What

please answer both
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A bond has a $1,000 par value, 8 years to maturity, and a 7% annual coupon and selts for $980. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. %3 b. Assume that the yield to maturity remains constant for the next 5 years. What will the price be 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. It is now January 1,2018 , and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has a 9.5% annual coupon and had a 20-year original maturity. (It matures on December 31, 2035.) There is 5 years of call protection (until December 31,2020 ), after which time it can be called at 109 -that is, at 109% of par, or $1,090. Interest rates have declined since it was issued, and it is now selling at 120.075% of par, or $1,200.75. a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places, 8% What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. b. If you bought this bond, which return would you actually eam? Select the correct option. 1. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. 1I. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. III. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC. IV. Investors would expect the bonds to be called and to eam the YTC because the YTC is greater than the YTM. V. InvEstors would not expect the bonds to be called and to eam the YTM because the YTM is greater than the YTC. c. Suppose the bond had been selling at a discount rather than a premium. Would the yield to maturity have been the most likely return, or would the vield to call have been most likely? I. Investors would expect the bonds to be called and to earn the YTC becouse the YTC is greater than the YTM. II. Investors would expect the bonds to be called and to earn the YIC becouse the YTC is less than the YTM. II. Investors would not expect the bonds to be called and to earn the YM because the YTM is greater than the YTC. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. V. Investers would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC

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