1.A corporation bond has the face value of $1,000, the coupon rate of 6% per annum and the remaining term-to-maturity of 10 years. Coupon interest on the bond will be paid semi-annually. The current yield-to-maturity of the bond is 5% per annum.

a)Find the current price of the bond.

b)Secondly, assume that the investor will buy this bond today and will hold the bond for the next 6 months. At the end of the next 6 months, the price of the bond is expected to be $1,100. Find the 6 month rate of return the investor is expected to earn.