You own a 8% bond maturing in two years and priced at 85%. Suppose that there is a 11% chance that at maturity the bond will default and you will receive only 45% of all promised payments. Assume annual coupons.

a. What is the bonds promised yield to maturity? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Promised yield %________

What is its expected yield? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Expected yield % ________