Pelzer Printing Inc. has bonds outstanding with $10$ years left to maturity. The bonds have a $7\%$ annual coupon rate and were issued $1$ year ago at their par value of $$1,000.$ However, due to changes in interest rates, the bond's market price has fallen to $$810\mathrm{.}40.$ The capital gains yield last year was $-18\mathrm{.}96\%.$

a$.$ What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. $\%$

b$.$ For the coming year, what are the expected current and capital gains yields? $($Hint: Refer to Footnote $6$ for the definition of the current yield and to Table $7\mathrm{.}1.)$ Do not round intermediate calculations. Round your answers to two decimal places.

Expected current yield: $\%$

Expected capital gains yield: $\%$

c$.$ Will the actual realized yields be equal to the expected yields if interest rates change? If not, how will they differ?

I. As rates change they will cause the end$-$of$-$year price to change and thus the realized capital gains yield to change. As a result, the realized return to investors will differ from the YTM$.$

II$.$ As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realized return to investors will differ from the YTM$.$

III. As long as promised coupon payments are made, the current yield will not change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realized return to investors should equal the YTM$.$

IV$.$ As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will cause the price to change and as a result, the realized return to investors should equal the YTM$.$

V$.$ As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing rates will not cause the price to change and as a result, the realized return to investors should equal the YTM$.$