4. Gentrex has just sold bonds that are currently trading at $905.52. The bonds

have 15 years before they mature, $1,000 par value and 12% annual coupons.

(a) On the basis of the above information, the yield to maturity should be?

(b) What would be the return on your investment in the bond if you bought it

when it was rst issued, held it for one year and then sold it when yields fell to

10.8%? What is the rate of capital gain and the current yield?