Suppose you purchase a ten-year bond with

12% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was

10.95% when you purchased and sold the bond,

a. What cash flows will you pay and receive from your investment in the bond per

$100 face value?

b. What is the internal rate of return of your investment?

Note: Assume annual compounding.

a. What cash flows will you pay and receive from your investment in the bond per

$100 face value?

The cash flow at time 1-3 is $

enter your response here

. (Round to the nearest cent. Enter a cash outflow as a negative number.)

The cash outflow at time 0 is $

enter your response here

. (Round to the nearest cent. Enter a cash outflow as a negative number.)

The total cash flow at time 4 (after the fourth coupon) is $

enter your response here

. (Round to the nearest cent. Enter a cash outflow as a negative number.)

b. What is the internal rate of return of your investment?

The internal rate of return of your investment is

enter your response here

%. (Round to two decimal places.)