1. Consider a 5-year bond paying 8 percent coupon. The bond is currently priced at $975.

1. Find the yield to maturity.
2. Find the realized yield if cash flows are reinvested at the yield to maturity. Explain your answers.
3. Find the realized yield if reinvestment rates are: 9 percent today, 10 percent in one year, 11 percent in two years, 12 percent in three years, 11 percent in four years, 10 percent in five years. Explain your answers.