Suppose that you are considering investing in a four-year bond that has a par value of $1,000 and a coupon rate of 6%.

(a) What is the price of the bond if the market interest rate on similar bonds is 6%? What is the bond's current yield?

(b) Now suppose that one year has gone by since your bought the bond, and you have received the first coupon payment. How much would another investor now be willing to pay for the bond? What was your total return on the bond? (Market interest rate remains at 5%.)