3. Bond Yields. A bond with face value $1,000 has a coupon rate of 8%, maturity 10 years, and yield to maturity of 7%. ( LO61 ) a. If interest is paid annually, what is the bond's price? b. If the bond is selling at $970, is its yield to maturity more or less than 8% ? 4. Bond Pricing. A General Power bond carries a coupon rate of 8%, has nine years until maturity, and sells at a yield to maturity of 7%. (Assume annual interest payments.) ( LO6-1 and a. What interest payments do bondholders receive each year? b. At what price does the bond sell? c. What will happen to the bond price if the yield to maturity falls to 6% ? 5. Bond Yields. A bond has eight years until maturity, has a coupon rate of 8%, and sells for $1,100. ( LO61 and L LO2 ) a. What is the yield to maturity if interest is paid once a year? b. What is the yield to maturity if interest is paid semiannually? 33. Credit Risk. A bond's credit rating provides a guide to its risk. Suppose that long-term bonds rated Aa currently offer yields to maturity of 7.5%. A-rated bonds sell at yields of 7.8%. Suppose that a 10-year bond with a coupon rate of 7.6% is downgraded by Moody's from an Aa to A rating. ( LO65 ) a. Is the bond likely to sell above or below par value before the downgrade? b. Is the bond likely to sell above or below par value after the downgrade