Titanic Corp issued 7 year 8% bonds due 2026 at par. This bond pays interest on a semi-annual basis. However, right after Titanic issued the bonds, the rate environment changed as the Fed lowered rates to stimulate growth. Now the market's required return is 4% (all else being equal). In this current environment, what is the trading price of the bond? Is this bond trading at a discount or premium? (5 points) Now suppose you find out that Titanic bonds are callable in 2 years at 101% (or $1010) right after Titanic issued the bonds. Assuming the trading price you found above, what is the bond's yield to call? Is the yield to call or yield to maturity higher? Why? (Hint: the yield to call is the yield you get if you hold the bond until the call date and redeem the call price ) (5 points)