7. (3 points) Today the price of a bond is $950. Will the price increase or decrease if in a year the yield to maturity for the bond: a. Increases b. Decreases c. Stays the same 8. (3 points) Today the price of a bond is $1,080. Will the price increase or decrease if in a year the yield to maturity for the bond: a. Increases b. Decreases c. Stays the same 9. (6 points) Describe how the concept of expected value or return works, and provide an example (you do not need to determine the expected value or return, however). 5. (3 points) Three investors, B, L and T, are interested in purchasing the same bond. Bis willing to pay $1,050 for the bond, L $980 and T $1,000. Rank the three investors in terms of their yields to maturity, from largest to smallest. 6. (3 points) You own three bonds with different coupon rates. Bond Q's is 8%, R's is 10% and T's is 6%. The yield to maturity for Q increases, the yield to maturity for R decreases, and the yield to maturity for T also decreases. What happens to the price of: a. Bond Q b. Bond R c. Bond T