At the beginning of the year, you bought a

$1,000

par value corporate bond with an annual coupon rate of

13

percent and a maturity date of

14

years. When you bought the bond, it had an expected yield to maturity of

14

percent. Today the bond sells for

$1,070.

a. What did you pay for the bond?

b. If you sold the bond at the end of the year, what would be your one-period return on the investment? Assume that you did not receive any interest payment during the holding period.