The Salem Company bond currently sells for

$1 comma 067.541,067.54,

has a coupon interest rate of

1313%

and a

$ 1000$1000

par value, pays interest

annually,

and has

1111

years to maturity.

a. Calculate the yield to maturity

(YTM)

on this bond.

b. Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond.