1. You buy a 3 year bond with a 10% coupon for $1,120. One year later, you sell it for $1,130. What is the bond's rate of return?
2. You buy a 4-year bond with 10% coupon rate. You pay for $ 1,100. YTM =12%. After two years, you sell it for $990. Assume that you reinvest the first coupon payment at 6% for one year. What is rate of return?