A firm issued 10-year original maturity bonds one year ago. The bond makes semiannual coupon payments and its par value is $1,000. Answer the following questions.

(a) If the current YTM is 6% and the bonds currently sell for $1,055, what must be the annual coupon rate on the bonds?

(b) Suppose that its YTM goes up to 8% after one year (i.e.: number of years to maturity = 8). What would the price of the bonds be after one year? Use the coupon rate you calculated in (a).

(c) Suppose that the bond price goes down to $900 two years from now (i.e.: number of years to maturity = 7). What would the YTM for the bond be after two years? Use the coupon rate you calculated in (a)