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aPprodches maturity. f. 1, what is the yield to maturity on a 10-year, 9% annual coupon, Si,000 par value bond that sells for $887.00? That

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aPprodches maturity. f. 1, what is the yield to maturity on a 10-year, 9% annual coupon, Si,000 par value bond that sells for $887.00? That sells for $1,134.202 What does the fact that it sells at a discount or at a premium tell you about the relationship between ra and the coupon rate? 2. What are the total retum, the current yield, and the capital gains yield for the discount bond? Assume that it is held to maturity, and the company does not default on it (Hint Refer to footnote 7 for the definition of the current yield and to Table 7.1.)

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