Jenna bought a bond that was issued by Sherlock Watson Industries (SWI) three years ago. The bond has a $1,000 maturity value, a coupon rate equal to 9 percent, and it matures in 17 years. Interest is paid every six months; the next interest payment is scheduled for six months from today.

Suppose that James just bought the same 15-year bond that Jenna bought and at the same time. If James sells his bond five years from the day he purchased it (with 10 years remaining to maturity) for $1,074, (i) what would be the bonds yield to maturity when he sells it and (ii) what return would he earn during the time he held the bond? What portion of the return represents capital gains and what portion represents the current yield? (iii) What return would the new investor earn in the year after James sells the bond? Assume interest is paid semiannually