Two bonds were issued five years ago, with terms given in the following table:

Why is the price range greater for the 9% coupon bond than the floating-rate bond?

What factors could explain why the floating-rate bond is not always sold at par value?

Why is the call price for the floating-rate bond not of great importance to investors?

Is the probability of call for the fixed-rate bond high or low?

If the firm were to issue a fixed-rate bond with a 15-year maturity, callable after five years at 106, what coupon rate would it need to offer to issue the bond at par value?

Why is an entry for yield to maturity for the floating-rate bond not appropriate?

\begin{tabular}{|lll|} \hline & 9\% Coupon & Floating rate \\ \hline Issue size & R250 million & R280 million \\ \hline Maturity & 20 years & 15 years \\ \hline Current price (\% of par) & 93 & 98 \\ \hline Current coupon & 9% & 5% \\ \hline Coupon adjusts & Fixed coupon & Every year \\ \hline Coupon reset rule & & 1 year T-bill rate +2% \\ \hline Callable & 10 years after issue & 10 years after issue \\ \hline Call price & 106 & 102.50 \\ \hline Sinking fund & None & None \\ \hline Yield to maturity & 9.9% & \\ \hline Price range since issued & R85R112 & R97R102 \\ \hline \end{tabular} \begin{tabular}{|lll|} \hline & 9\% Coupon & Floating rate \\ \hline Issue size & R250 million & R280 million \\ \hline Maturity & 20 years & 15 years \\ \hline Current price (\% of par) & 93 & 98 \\ \hline Current coupon & 9% & 5% \\ \hline Coupon adjusts & Fixed coupon & Every year \\ \hline Coupon reset rule & & 1 year T-bill rate +2% \\ \hline Callable & 10 years after issue & 10 years after issue \\ \hline Call price & 106 & 102.50 \\ \hline Sinking fund & None & None \\ \hline Yield to maturity & 9.9% & \\ \hline Price range since issued & R85R112 & R97R102 \\ \hline \end{tabular}