Problem 3 A newly issued bond pays its coupons once a year. Its coupon rate is 4%, its maturity is 20 years, and its yield to maturity is 7%. The par value of the bond is $1,000. a) Find the holding period return for a one-year investment period if the bond is selling at a yield to maturity of 6% at the end of the year. (4 points) b) If you sell the bond after one year when its yield is 6%, what taxes will you owe if the tax rate on interest income is 40% and the tax rate on capital gains income is 30%? The bond is subject to original-issue discount (OID) tax treatment. (7 points) c) What is the after-tax holding period return on the bond? (5 points)