1. Consider a bond paying a coupon rate of 12% per year semiannually when the market interest rate is only 5% per half-year. The bond has five years until maturity and the par value of $1,000.
   1. Find the bond price today and two years from now. Assume that the market interest rate does not change over two years.
   2. What is the total rate of return on the bond over a two-year holding period? Assume a semiannual coupon reinvestment rate is 4% over the holding period.