Yield 9. John and Susan are interested in using bonds to pay $70,000 payments for Dan's first year and second year of college and then $70,000 for the third and fourth years, with the first payment due in 2 years and the other one in 4 years. a. Figure the yield to maturities, durations, and current yields of the following $1,000 bonds, with semiannual compounding. Credit rating Annual Current Years Issuer (Moody's/S& market coupon left to Current Duration YTM P/Fitch) rate price in years maturity Xcel Aa3/A/A+ $990.30 GlaxoSmithKline 3.38% $995.31 PepsiCo A1/A+ 3.50% $997.98 Lowe's Baa1/BBB+ 4.05% $998.46 Toyota Aa3/AA- 3.18% $995.56 A2 Boeing 2.80% $988.44 3.60% 2 A2 4 20 4 20 2 b. Choose two bonds between the choices above that would be the best for the needed payments (consider credit ratings as well as yield). John and Susan ask you about immunization and/or duration matching to develop redemption for the needed payments. Should they use either scheme, or another? Yield 9. John and Susan are interested in using bonds to pay $70,000 payments for Dan's first year and second year of college and then $70,000 for the third and fourth years, with the first payment due in 2 years and the other one in 4 years. a. Figure the yield to maturities, durations, and current yields of the following $1,000 bonds, with semiannual compounding. Credit rating Annual Current Years Issuer (Moody's/S& market coupon left to Current Duration YTM P/Fitch) rate price in years maturity Xcel Aa3/A/A+ $990.30 GlaxoSmithKline 3.38% $995.31 PepsiCo A1/A+ 3.50% $997.98 Lowe's Baa1/BBB+ 4.05% $998.46 Toyota Aa3/AA- 3.18% $995.56 A2 Boeing 2.80% $988.44 3.60% 2 A2 4 20 4 20 2 b. Choose two bonds between the choices above that would be the best for the needed payments (consider credit ratings as well as yield). John and Susan ask you about immunization and/or duration matching to develop redemption for the needed payments. Should they use either scheme, or another