A $6\mathrm{.}5\%$ Boeing Inc. callable bond that makes semi$-$annual coupon payments and has a face value of $$1,000$ is currently priced at $$868$ and has $19$ years to maturity. A year from now, the Yield to Maturity changes to $7$ percent.

Calculate the bond$$s current Yield to Maturity $($YTM$).(2$ Points$)$

Calculate the profit$/$loss on the bond if the bond is purchased now and sold one year later when the YTM is $7$ percent. $(4$ Points$)$

A Stone Container zero coupon bond with $9$ years to maturity and a face value of $$1,000$ is currently selling for $$454\mathrm{.}00.$ Should the bond be purchased if the required rate of return is $9\%?(3$ Points$).$

Many analysts predict that inflation is going to be a significant problem for bond holders in the coming years. Using an example of a bond, explain the two ways higher inflation hurts bond holders? $(7$ points$)$