Case Study Questions $($ CASE$-$ WILSOM FAMILY FOUNDATION$)$

$1.$ What are the yields to maturity $($YTMs$)$ on the three bonds? Please do this analysis by mapping out the cash flows rather than using, for example, the yield function in excel.

$2.$ Assuming the reported credit ratings are correct and that the market yields for those ratings are appropriate expected returns $($benchmark$)$ for the bonds, quantify the attractiveness of the bonds in two ways: How does the yield compare to the benchmark? How does the current price compare to the benchmark$-$yield implied price?

$3.$ Janet O$$Brien suggests that the bond ratings are incorrect. If O$$Brien$$s alternative ratings $($a full category improvement$)$ are correct, and the market yields are appropriate expected returns for the bonds, once again quantify the attractiveness of the bonds in two ways: How does the yield compare to the benchmark? How does the current price compare to the benchmark$-$yield implied price.