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a. What is the yield to maturity? Round your answer to two decimal places. % b. For the coming year, what is the expected current

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a. What is the yield to maturity? Round your answer to two decimal places. \% b. For the coming year, what is the expected current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1 .) Round your answer to two decimal places. % For the coming year, what is the expected capital gains yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. % c. Will the actual realized yields be equal to the expected yields if interest rates change? If not, how will they differ? 1. As long as promised coupon payments are made, the current yield will not change as a result of changing interest rates. However, changing rates wil cause the price to change and as a result, the realized return to investors should equal the rTM. II. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realized return to investors should equal the YTM. III. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will not cause the price to change and as a result, the realized return to investors should equal the YTM. IV. As rates change they will cause the end-of-year price to change and thus the realized capital gains yield to change, As a result, the realized return to investors will differ from the YTM. V. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realized return to investors will differ from the YTM

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