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Evergrande Group issued $100 million face value bonds on January 1, 2012. The bonds carry a coupon rate of 6% with annual coupon payment. The bond matures on January 1, 2022.

a) Determine the market value of the bond issued on January 1, 2012, if it was priced to produce a yield (YTM) of 10% compounded annually on that date. [Note: Round your final answer to 2 decimal places] (5 marks)

b) Assume the bond is sold on January 1, 2013, with an increase in the yield of 1% to 11% compounded annually on that date. Calculate the

(i) Current yield (on Jan 1, 2012)

(ii) 1-year Yield on capital gain/loss

(iii) 1-year Holding period yield [Note: Round your final answer to two decimal places] (12 marks)