Consider a 15-year 7% coupon bond with a par value of $1,000 and semi-annual coupon payments. The bond price is $800. What is the yield to maturity on the bond? (4 points) An investor bought the bond at $800 and plan to sell the bond in 5 years. The investor assumes that he can reinvest the coupons at a rate of 9%. What is the investor's horizon yield (ie. total yield) during his investment horizon? Assuming the market discount rate at the end of his investment horizon is 10%. Right after the investor bought the bond, the market interest rate unexpectedly went up to 11%. At this new reinvestment rate, what is the investor's interest-on-interest income at the end of his investment horizon (i.e., after 5 years)? Right after he bought the bond, the market interest rate unexpectedly went up to 11%. After this rate hike, what is the capital gain/loss for the investor at the end of his investment horizon?

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