Assume that you have a $1-$year investment horizon and you are trying to choose between $4$

bonds. All $4$ bonds have the same degree of default risk, $$1000$ face value, and mature in $10$

years. The first choice, Bond Z is a zero$-$coupon bond. Bonds $A,B,$ and C $,$ have $5\%,7\%,$ and

$9\%$ coupon rates, respectively and pay coupons annually.

a$.$ If the bonds are now priced to with a $7\%$ yield to maturity, what are their prices

now?

b$.$ If you expect their yield to maturity to remain $7\%,$ what will the price of each bond

be in $1$ year?

c$.$ What is the before tax holding period return for year $1$ for each bond?