Saxon currently has zero coupon bonds with 7 years left until maturity (Face value is $1000). Assume interest is paid annually.

Saxon currently has zero coupon bonds with 7 years left until maturity (Face value is $1000). Assume interest is paid annually. a) If the yield to maturity is currently 69, find the price of the bond. b) XYZ buys one bond today. Two years from now, market conditions have changed and the yield to maturity has fallen to 49. What happens to the price of the bond? c) XYZ buys a bond today (at the price calculated in part a) and can sell it in 2 years (at the price calculated in part b). Find their return. Did they earn more or less than the 6% yield to maturity? Why? Please show your work