7. If the current price of a 12-year 8% coupon bond which pays semiannually is $86.20, what is its yield to maturity? If you purchased this bond, held it for two years and the yield to maturity fell to 7.5% at what would its new price be? If you then sold the bond what effective rate of return would you have earned on this two-year investment? Assume there are no taxes to consider. 8. Portfolio Alpha contains a 3-year zero-coupon bond with a face value of $3,850 and a 10-year zero-coupon bond with a face value of $10,000. Portfolio Beta is composed of only a 7-year zero-coupon bond with a face value of $12,000. The current yield on all three bonds is 10% per annum. Show that both portfolios have the same duration. What percentage changes in the two portfolio values would result from yields jumping to 15% per annum