c. Mr. Clark is considering another bond, Bond D. It has a 9% semiannual coupon and a $1,000 face value (le, it pays a $45 coupon every 6 months) Bond D is scheduled to mature in 8 years and has a price of $1,170. It is also callable in 6 years at a call price of $1,030. 1. What is the bond's nominal yield to maturity? Round your answer to two decimal places. 2. What is the bond's nominal yield to call? Round your answer to two decimal places 3. U Mr. Clark were to purchase this bond, would he be more likely to receive the yield to maturity or yield to call? Explain your answer Because the YTM is the YTC, Mr. Clark expect the bond to be called. Consequently, he would earn 1. Explain briefly the difference between price risk and reinvestment risk. This risk of a decline in bond Values due to an increase in interest rates is called The risk of an income decine due to a drop in interest rates is called Which of the following bonds has the most price risk? Which has the most reinvestment risk? . Al-year bond with a 7% annual coupon A 5-year bond with a 7% annual coupon . A 5-year bond with a zero coupon A 10-year bond with a 7% annual coupon A 10-year bond with a zero coupon A has the most price risk e has the most reinvestment risk g. Calculate the price of each bond (A, B, and C) at the end of each year until maturity, assuming interest rates remain constant. Round your answers to the nearest cent. Years Remaining Until Maturity 12 Bond A Bond B Bond C $ $ $ 11 $ 10 $ $ $ $ 9 $ 8 $ $ $ $ $ $ $ $ $ $ $ 7 6 $ $ $ $ 5 4 $ $ $ 3 $ $ $ 2 $ $ $ $ 1 $ $ 0 $ $ $ Create a graph showing the time path of each bond's value. Choose the correct graph. The correct graph is A-Z A B. Time Paths of Bonds A, B and C Time Paths of Bonds A, B and C $1,400 51,400 $1,200 S1,200 $1,000 $1,000 SNOO 5800 Bond Value Bond Value 5600 5600 5400 5400 $200 5200 SO 12 12 Years Remaining Until Matury Bowd Bon A Bond Hond A Years Remaining Until Malunity Blend Bond c 2 Time Paths of Boods A, B, and C D $1,400 Time Paths of Hands A, B, and $1,400 $1.200 A-Z $1,200 51.000 $1,000 SNOO Bond Value $800 Bond Value 5600 5600 $400 5400 5200 $200 N SO 12 SO 12 Years Remaining Until Maturity Band A Bond B Bond Years Remaining Until Maturity Bond B Bond A Bond 1. What is the expected current yield for each bond in each year? Round your answers to two decimal places Years Remaining Until Maturity Bond A Bond B Bond C 12 % 9% 96 11 %6 % 10 96 % 9 % B 9 % 7 % 6 % % % 5 % % % 3 % 9 % 4 % % % % % % 2 1 % % 2. What is the expected capital gains yield for each bond in each year? Round your answers to two decimal places Years Remaining Until Maturity Bond A Bond B 12 Bond C % 96 % 11 % % 10 % % 9 % % % 8 9 % % % 7 % % 996 % % 6 5 996 % % 4 90 % % 3 % % % % 3. What is the total return for each bond in each year? Round your answers to two decimal places. Years Remaining Until Maturity 12 Bond A Bond B Bond C % % % 11 % 96 9 10 ya % % 9 % % 90 8 % % % 7 % % 6 % % % 5 % % 96 4 % 3 % % % 2 9 % % % 9%