QUESTION 7 What is the yield to maturity for a bond paying $100 annually that has six years until maturity and sells for $1,000? Assume par = $1,000. O 6.0% 8.5% O 10.0% O 12.5% QUESTION 8 What happens to the price of a three-year bond with an 8% coupon when interest rates change from 8% to 6%? Hint: Think of interest rate as the bond's yield to maturity. Now find the price of the bond when the yield is 8% and then recompute the bond's price when the yield is 6%. Now how did the bond price change? A price increase of $51.54 A price decrease of $51.54 A price increase of $53.46 No change in price QUESTION 9 Which of the following is fixed (e.g., cannot change) for the life of a normal bond? O Current price. o Current yield. Yield to maturity. O Coupon rate