You own a bond with an annual coupon rate of 7% maturing in two years and priced at 89%. Suppose that there is a 12% chance that at maturity the bond will default and you will receive only 42% of the promised payment. Assume a face value of $1,000. a. What is the bonds promised yield to maturity? (Enter your answer as a percent rounded to 2 decimal places.)

b. What is its expected yield (i.e., the possible yields weighted by their probabilities)? (Enter your answer as a percent rounded to 2 decimal places.)

please do not use excel. please show work step by step.

thank you