A two-year bond with par value $1,000 making annual coupon payments of $104 is priced at $1,000.

a. What is the yield to maturity of the bond? (Round your answer to 1 decimal place.)

Yield to maturity %

b. What will be the realized compound yield to maturity if the one-year interest rate next year turns out to be (a) 8.4%, (b) 10.4%, (c) 12.4%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Interest Rate		Realized YTM
8.4	%	%
10.4	%	%
12.4	%	%