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For the following questions, assume the normal case that coupon payments are semi-annual. a. What is the yield to maturity on a 16 -year, 4%

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For the following questions, assume the normal case that coupon payments are semi-annual. a. What is the yield to maturity on a 16 -year, 4% coupon bond if the bond is currently selling for $1,000 ? b. For the bond above, suppose that immediately after purchase market rates change to 3.10%. If you hold the bond for 5 years and then sell it, what is your effective annual return on this investment? a. The YTM is % (enter response rounded to decimal places; i.e., x.x% ) b. Your effective annual return is % (enter response rounded to decimal places; i.e., x.x% )

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