Suppose that today you buy an $7\%$ annual coupon bond for $$1,100.$

a$)$ The bond has $15$ years to maturity and $$1000$ face value. What rate of return do you

expect to earn on your investment? $(2$ marks$)$

b$)$ Six years from now, the YTM on your bond has declined by $1\mathrm{.}97\%,$ and you decide to

sell. What price will your bond sell for? $(2$ marks$)$