Answer all questions and show all work, if applicable. Partial credit will not be provided without work, if work can be shown.

1. A $1,000 General Electric bond pays an annual coupon rate of 8%, has 9 years until maturity, and sells at a yield to maturity of 7%. a) What interest payments will bondholders receive each year? b) At what price does the bond sell if semi-annual interest payments are made? c) What will happen to the bond price calculated in (b) if the yield-to-maturity falls to 6%?