Assume you have a one-year investment horizon and are trying to choose among three bonds. All have the same degree of default risk and mature in 10 years. The first is a zero-coupon bond that pays $1,000 at maturity. The second has an 8.9% coupon rate and pays the $89 coupon once per year. The third has a 10.9% coupon rate and pays the $109 coupon once per year.

a.	If all three bonds are now priced to yield 8.9% to maturity, what are their prices? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Zero	8.9% Coupon	10.9% Coupon
Current prices	$	$	$

b-1.	If you expect their yields to maturity to be 8.9% at the beginning of next year, what will their prices be then? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Zero	8.9% Coupon	10.9% Coupon
Price one year from now	$	$	$

b-2.	What is your rate of return on each bond during the one-year holding period? (Do not round intermediate calculations.Round your answers to 2 decimal places.)

	Zero	8.9% Coupon	10.9% Coupon
Rate of return	%	%	%