Consider an investor initially purchases a 10-year, 8% annual coupon payment bond at a price of $85.503075 per $100 of par value. The bonds yield to maturity (YTM) is 10.40%.

1. Assume the investor holds this bond until maturity. Also assume that the interest rates go down to 9.40% (100 basis points decrease) after the bond is purchased and before the first coupon is received. What is the investors realized rate of return? ___________

2. Assume the investor sells this bond after four years. Also assume that the interest rates go down to 9.40% (100 basis points decrease) after the bond is purchased and before the first coupon is received. What is the investors realized rate of return? ____________