A two-year bond with par value $1,000 making annual coupon payments of $99 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) 7.9%, (b) 9.9%, (c) 11.9%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Interest Rate		Realized YTM
7.9	%	%
9.9	%	%
11.9	%	%