7. Assume that James River Corporations anticipated new 28-year 12% bond is not callable and sells for $1,371.73.
   1. What is the nominal and effective annual YTM on this bond?
   2. What is the current yield on this and the original 28-year bond selling for $920.34?
   3. What is each bonds expected price after one year, assuming they both have a YTM of 8.5%? (Hint: the years to maturity for both bonds will be 27 years one year from now.) What is the capital gains yields for the year for each bond assuming no change in interest rates? (Hint: Capital Gains Yield= P1-P0P0)
   4. What is the expected total (percentage) return on each bond during the next year?
   5. What would happen to the price and current yield each bond over time assuming constant future interest rates (8.5%)? (Hint: the years to maturity is decreasing over time)