1. Insitutional Investor Corp purchased a corporate bond that matures in three years. The bond has a coupon interest rate of 9 percent and its yield to maturity is 6 percent. If market interest rates remain constant and Institutional Investor Corp sells the bond in 12 months, the capital gain from holding the bond will be _____.

   		positive because she purchased the bond at a discount and the bond price will approach its face value as it nears its maturity
   		negative because she purchased the bond at a discount and the bond price will approach its face value as it nears its maturity
   		positive because she purchased the bond at a premium and the bond price will approach its market price as it nears its maturity
   		negative because she purchased the bond at a premium and the bond price will approach its face value as it nears its maturity
   		positive because she purchased the bond at a discount and the bond price will approach its market price as it nears its maturity