A 2-year bond with par value $1,000 making annual coupon payments of $98 is priced at $1,000.

1. What is the yield to maturity of the bond? (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

2. What will be the realized compound yield to maturity if the 1-year interest rate next year turns out to be (a) 8%, (b) 11%, (c) 14%? (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

r Realized YTM

8 % %

11 % %

14 % %