Chapter 12 Financial Planning Exercise 18 Clean and dirty hond prices You have decided to 6 percent semiannual coupon bond two months after the last coupon payment. The band is currently selling for $975.00. Answer the following questions about the bond. Assume that the par value of the bond is $1,000. Round your answer to marest cent. a. What is the dean price of the bond? b. What is the dirty Oull) price of the band? c. Explain how the clean and dirty prices of the bond are relevant to the buyer of the bond. Chapter 12 Financial Planning Exercise 15 Calculating current yield and return on investment Assume that an investor pays $000 for a long-term bond that carries a coupon. During the next 12 months, interest rates drop sharply, and the investor sells the bond at a price of $962.50. Assume bond par value is $1,000 a. Find the current yield that edited on this bond at the beginning of the year. Round the answer to two decimal places What was it by the end of the 1-year holding period? Round the answer to two decimal places b. Compute the return on this investment using the proximate yield formula and a 1-year investment period. Round the answer to two decimal places. Do not round Intermediate calculations