1. Consider a Government of Canada bond that has par value 1,000, annual coupon rate 5%, and 10 years to maturity. The current market interest rate on these bonds is 10%. Answer the following questions:

   (a) At the current market interest rate, what is the price of the bond? (b) If you purchase the bond at the price calculated in part a), and sell it one year later for 880. What is your rate of return