$2.$ A bond has a tenor of $10$ years and carries a coupon of $6\%,$ paid semiannually. The current price of the bond is $104\mathrm{.}32($per $100$ of par$).$ You forecast that the yield $($reinvestment rate$)$ will decrease by $50$ basis points per year after the third coupon payment.

a$.$ Estimate the capital gain$/$loss if you sell the bond after a $7-$year holding period. Estimate what the realized $/$ horizon yield would be at the end of year $7.$

b$.$ Repeat part a$)$ for a $4-$year holding period.