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please help It is now danuary 1, 2019, and you are considering the purchase of an outstanding bond that was issued on lanuary 1, 2017.

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It is now danuary 1, 2019, and you are considering the purchase of an outstanding bond that was issued on lanuary 1, 2017. It has an 8.5% annual coupon and had a 30 . year onginal maturity. (It matures on December 31, 2046.) There is 5 years of call protection (until December 31,2021 ), after which time it can be called at 108-that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 116,57% of pat, or $1,165.70. a. What is the vield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the yeld 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 earn? 1. Irvestors would not expect the bonds to be called and to earn the YTM because the YIM is greater than the YTC. II. Investors would not expect the bonds to be called and to cam the YTM because the YTM is less than the YTC. III. Investors would expect the bonds to be colled and to earn the Yic because the YiC is less than the YIM. IV Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. c. Suppose the bond had been selling at a discount rather than a premum. Would the yield to maturity have been the most likely return, or would the yeld to call have been most likely? 1. Investors would expect the bonds to be called and to eam the YIC because the YTC is greater than the YTM. II. Investors would expect the bonds to be called and to earn the YIC because the YTC is less than the YTM. 11. Investors would not expect the bends to be called and to earn the YTM because the YTM is areater than the YTC. IV. Investors would not expect the bonds to be called and to earn the YIM because the YTM is less than the YTC

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