You purchased a $30-$year bond with a $$1,000$ face value and a $10\%$ coupon rate at a price of $$1,000$ exactly two years ago at its issued date and collected your second coupon today. The

market rate is $13\%.$ You want to sell the bond next year, that is$,$ you either must sell your bond

today or a year from today $($for simplicity, assume that you can sell next year immediately after you

collect the $3$ rd coupon payment, and you cannot sell the bond between now and then.$)$

a$)$ If the market rate stays at $13\%$ in the future, would you sell the bond today or next year?

b$)$ What if you, individually, expect the rate to go down next year? You expect the rates to be at

$7\%.$ Would you sell now or next year?