Sam just purchased a 10-year annual coupon bond with a nominal coupon rate of 8% per annum and a face value of $1,000. The price of the bond is calculated so that she will earn a nominal yield to maturity of 7% per annum.

(a) Without performing any calculations, explain whether the bond was purchased at discount, at par or at premium.

(b) Calculate the bond price paid by Sam.

(c) A year later, immediately after receiving the first coupon payment, she sells the bond to Hugo at a price such that Hugos nominal yield to maturity is 10% per annum. Calculate the price paid by Hugo.

(d) Calculate Sam's total realised return over the 1-year holding period?