a. What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does the fact that a bond sells at a discount or at a premium tell you about the relationship between la and the bond's coupon rate? Describe what the yield to maturity means from the perspective of the bond buyer.

- What is the current yield, the capital gains yield, and the total retum in each case in the preceding question?

b. Suppose that the bond described in partA is callable in 5 years at a call price equal to $1,090. What is the yield to call on the bond if its market value is $887? What is the TC on the same bond if its current market price is $1,134.20?