The YTM on a bond is the interest rate you earn on your investment if you hold the bond to its maturity. If you actually sell the bond before it matures, your realized return is known as the internal rate of return (IRR).

Requirement 1: Suppose that today you buy an annual coupon bond with a coupon rate of 7 percent for $875. The bond has 10 years to maturity. What rate of return do you expect to earn on your investment? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Requirement 2: Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. (a) What price will your bond sell for? (Do not round intermediate calculations, i.e., the result in the previous question is an intermediate result. Round your answer to 2 decimal places (e.g., 32.16).) (b) What is the IRR on your investment? (Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)