A firm's bonds have a maturity of 8 years with a $1,000 facevalue, have an 11% semiannual coupon, are callable in 4 years at$1,142, and currently sell at a price of $1,261.56.
- What is their nominal yield to maturity? Round your answer totwo decimal places.
%
- What is their nominal yield to call? Round your answer to twodecimal places.
%
- What return should investors expect to earn on thesebonds?
- Investors would expect the bonds to be called and to earn theYTC because the YTC is greater than the YTM.
- Investors would not expect the bonds to be called and to earnthe YTM because the YTM is greater than the YTC.
- Investors would not expect the bonds to be called and to earnthe YTM because the YTM is less than the YTC.
- Investors would expect the bonds to be called and to earn theYTC because the YTC is less than the YTM.
- Investors would expect the bonds to be called and to earn theYTC because the YTM is less than the YTC.
-Select-IIIIIIIVV
