If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4-year 5.0 percent coupon bond with annual coupon payments and a face value of $1,000.

a) Find bond price today, bond price in one year, and rate of return assuming the yield to maturity is 4.0 percent.

b) Find bond price today, bond price in one year, and rate of return assuming the yield to maturity is 6.0 percent.