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Suppose you just purchased a bond (Face Value = $1,000) with 20 years to maturity that pays an annual coupon of $40 and is selling

Suppose you just purchased a bond (Face Value = $1,000) with 20 years to maturity that pays an annual coupon of $40 and is selling at par. Calculate the one-year holding period return for each of these three cases: (Show your answers to 4 decimal places.)

a. The yield to maturity is 5.5% one year from now.

b. The yield to maturity is 2.5% one year from now.

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