an investor purchases a bond with a 6% coupon (annual) and $100 facevalue with two years to maturity at a yield of 7%. The investor holds the bond to maturity.The yield increases to 10% in one year, and then falls back to 7% at maturity. It was shownthat the HPR equals around 7.09%.(a).What, if anything, changes if we now assume that the yield change to 10% ispermanent?(b).Now assume that the bond is purchased with three years to maturity, rather than two,at a yield of 7%. Suppose the yield permanently increases to 10% in the followingyear and the investor sells the bond after holding for two years, i.e. with one yearto maturity. Now what is the HPR and how does it compare with the initial yield of7%?