Assume that an investor is looking at two bonds: Bond A is a 30-year, 10.5% (semiannual pay) bond that is priced to yield 12.5 %. Bond B is a 30-year, 9.5% (annual pay) bond that is priced to yield 10%. Both bonds carry 7-year call deferments and call prices (in 7 years) of $1 comma 080.
a. Which bond has the higher current yield?
b. Which bond has the higher YTM?
c. Which bond has the higher YTC?