Ezzell Enterprises' noncallable bonds currently sell for $879.00. They have a 5-year maturity, semi-annual coupon rate of 12.00%, and a par value of $1000. What is the bond's capital gain or loss yield? Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.

13.70%

15.57%

2.00%

1.92%

13.65%

Suppose 1-year Treasury bonds yield 3.70% while 2-year T-bonds yield 4.10%. Assuming the pure expectations theory is correct, and thus the maturity risk premium for T-bonds is zero, what is the yield on a 1-year T-bond expected to be one year from now?

5.13%

4.50%

3.47%

5.45%

3.74%