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Suppose you buy a 7.6 percent coupon bond today for $1,070. The bond has 12 years...

Suppose you buy a 7.6 percent coupon bond today for $1,070. The bond has 12 years to maturity.

               

a.

What rate of return do you expect to earn on your investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

           

  Rate of return %

          

b.

Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What price will your bond sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

     

  Price $   
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