Consider a $12$ percent $($annual$)$ coupon bond that matures in $3$ years, has a par value of

$1000,$ and pays coupon semiannually. Suppose that currently this bond is available in the market for

$1000.$ Suppose that your investment horizon is $1$ year and you expect that the market yield to maturity of

this type of bond will decrease to $7\mathrm{.}5\%$ in $1$ year from now.

a$)$ Find, what will be the value of this bond in $1$ year from now considering the expectations outlined.

b$)$ Calculate the horizon yield from this bond considering the investment horizon and the expectations

outlined.