eBook Problem Walk Through Pelzer Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have an 8% annual coupon rate and were issued 1 year age at their par value of $1,000. However, due to changes in interest rates, the bond's market price has fallen to $101.40. The capital gains yield last year was 9.86% a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places % b. For the coming year, what are the expected current and capital gains yields? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations, Round your answers to the decimal places Expected current yield: % Expected capital gains yield: c. Will the actual realced yields be equal to the expected yields if interest rates change? If not, how will they differ? 1. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realized return to vestors should equal the YTM 11. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will not cause the price to change and as a result, the realized return to investors should equal the YIM III. As rates change they will cause the end of year price to change and thus the realized capital gain yield to change. As a result, the realized return to investors will defer from the YTM IV. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realued return to investors will differ from the YTM V. As long as promised coupon payments are made the current yield will not change as a result of changing interest rates. However changing rates will cause the price to change and as a result, the realized return to investors should equal the YIM