Assume that a bond with the following characteristics is being discussed: $$ Par Value $=100\mathrm{.}000$ Maturity $=15$ years from today $$ Coupon $=4\%,$ with interest paid semi$-$annually $$ Current Value $=106\mathrm{.}000($Price per $$100$ of par$)$

$1.$ What is the current yield for this bond?

$2.$ What is the YTM $($or IRR$)$ for an investor who purchases the bond at this price?

$3.$ If the investor has a holding period of $10$ years, is the investor guaranteed to receive the YTM that you just calculated? Why or why not? Assume no possibility of default or bankruptcy.

$4.$ What is the expected capital gains yield for the first year that this investor owns the bond?

$5.$ Why do bond prices move down when market interest rates move up$?$

$6.$ Consider a bond with a $4\mathrm{.}5\%$ coupon and a $6\mathrm{.}0\%$ YTM$.$ If the bond$$s YTM remains constant, then in one year, will the bond price be higher, lower, or the same?