3. Two bonds are both rated AA, are $1000 par value, pay coupons annually, and mature in four years. Bond A pays a coupon of 12%, while Bond B pays a coupon of 4%. The discount rate for debt of this nature is 10%. For each bond, determine the: A. Current price B. Yield to maturity C. Current yield

4. You are in the 35% tax bracket. A non-taxable bond currently pays 4.2%; what would the yield need to be on an otherwise equivalent taxable bond for you to be indifferent between the two?