Use the following information to answer the next 2 questions:

You are considering an investment in the bonds of the Front Range Electric Co. with 20 years to maturity. The bond has a coupon rate of 5% and interest is paid semiannually. It has a face value of $1,000 and is currently selling for $1,280.

These bonds can be called in 6 years at 107% of the par value (call premium of 7% of the face value).

1) What is the yield to maturity?

		5.00%
		4.05%
		3.11%
		1.52%
		2.77%