Consider a bond with the following features: Exactly 7 years to maturity 6% coupon rate, paid semi-annually 8% yield to maturity $100 par value A. Suppose you hold the bond until maturity and its yield does not change. What will be your annualized rate of return?

B. Ignore question 3 and consider the following scenario. Suppose that you buy the bond today and exactly two years later, the yield on this bond increases from 8% to 9%. If you sell the bond immediately after the yield increases, what would be your annualized rate of return on this investment? Assume that you reinvested any coupon payments at the yield to maturity (e.g., the 8%).