Question: Question 2 (14 marks) A 10%, 25-year bond has a par value of $1,000 and a call price of $1,075. (The bond's first call date

Question 2 (14 marks) A 10%, 25-year bond has a par value of $1,000 and a call price of $1,075. (The bond's first call date is in 5 years.) Coupon payments are made semiannually. It is currently being priced in the market at $1,200. a. Find the current yield. b. Find the YTM (yield to maturity) c. Find the YTC (yield to call). d. Which of these three yields is the highest? Which is the lowest? Which yield would you (1 mark) (3 marks) 4 marks) use to value this bond? Explain. (6 marks)

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