$7-2$ YIELD TO MATURITY AND FUTURE PRICE A bond has a $$1,000$ par value, $12$ years to maturity, and an $8\%$ annual coupon and sells for $$980.$

a$.$ What is its yield to maturity $($YTM$)?$

Answer:

$8\mathrm{.}27\%$

b$.$ Assume that the yield to maturity remains constant for the next three years. What will the price be $3$ years from today?

Answer:

$$983\mathrm{.}38$