Attempts [3:]: Keep the Highest 1 I 4 12. Problem 5-22 (Yield to Maturity and Yield to Call) i- Yield to Maturity and Yield to Call Amot International's bonds have a current market price of $1,300. The bonds have a 12% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). a. What is the yield to maturity? Round your answer to two decimal places. L_,l % b. What is the yield to call if they are called in 5 years? Round your answer to two decimal places. | % c. Which yield mlght Investors expect to earn on these bonds, and why? I. Investors would expect the bonds to be called and to earn the YTC because the YTC ls less than the YTM. II. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC. III. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM ls less than the YTC. eleci; B s indenture Indicates that the call provision gives the rm the right to call them at the end of each year beginning in Year 5. In Year 5, they t in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, In Year 6 they may be d. The bond' and so on. If the yield curve ls horizontal and interest rates remain at may be called at 109% of face value, bu called at 108% of face value, in Year 7 they may be called at 107% of face value, their current level, when Is the latest that Investors might expect the rm to call the bonds? 3 -Selecr