Jordan Sin & Aaron Yuen Limited issued a new series of 20 years, 10% annual coupon bonds on January 1, 1990. The bonds were issued at $1196.36 each.

a. What was the yield to maturity of the bonds on January 1, 1990?

b. What was the price of the bonds on January 1, 2003 (13 year later) assuming the required rate of return is 11%?

c. Find the current yield and the capital gain yield if Shivani Anand purchases the bond on January 1, 2003, and sell it on January 1, 2004. Assume required rate of return will stay at 11%. d. Suppose Alan Cheung bought the bond on January 1, 1990 and sold it on January 1, 2000 for $1312.93. What was the annual holding period return? Compare this yield to YTM when you first bought the bond. Why are they different?