Problem 6 (15 Points) (a) Suppose Ford Motor Company sold an issue of bonds with a 12-year maturity, a $1,000 par value, a 12% annual coupon rate. Two years after the bonds were issued, the going rate of interest on bonds such as these had risen to 14 percent. At what price would the bonds sell? (b) ABC Motors issued a 15-year, 10% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,095 and it sells for $1,178. What is the bond's nominal yield to maturity and its nominal yield to call? Would an investor be more likely to earn the YTM or the YTC? (ii) What is the current yield? Is this yield affected by whether the bond is likely to be called? (iii). What is the expected capital gains (or loss) yield for the coming year? Is this yield dependent on whether the bond is expected to be called? Explain your answer. I (c) You are considering a 10-year, $1,000 par value bond. Its coupon rate is 9%, and interest is paid semiannually. If you require an effective" annual interest rate (not a nominal rate) of 7.25%, how much should you be willing to pay for the bond