a$.$ For the Zero Coupon Bond $2$ above that has a $$1,000$ maturity value and $5$ years to maturity, what will be your annual compound yield for your $5-$year holding period if you hold the bond to maturity, receiving the $$1000$ maturity value at the end of Year $5?$

Hint Recall: Annual Compound Yield for a Zero Coupon Bond

$=\{[$Maturity Value $/$ Bond$$s Price$]^1/$n$\}-1$

Annual Compound Yield for Bond $2$ at End of Year $5\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

b$.$ Suppose for the Coupon Bond $1$ above that has a fixed $6\%$ annual coupon rate, $$1,000$ maturity value and $5$ years to maturity, rates go down to $5\%($r$)$ right after you purchase the bond, so all the coupon payments have to be reinvested at the new rate $($r$)$ of $5\%.$ What will be your annual compound yield $($ACY$)$ if you hold the bond to maturity.

Hint: Recall FV of Bond Coupons Reinvested for $5$ years $=$ Coupon Payment $($FVIFA r$,5)$

Where: FVIFA $=(((1+$r$)^$n$)-1)/$r

ACY $=\{[($FV of Coupons $+$ Maturity Value$)]/($Bond$$s Price You Paid$)]\}^1/$n $-1,$ where n $=5$ years.

Annual Compound Yield for Bond $1$ at the End of Year $5\_\_\_\_\_\_\_\_\_\_\_\_$

c$.$ Explain why you did not receive your desired annual compound yield for Bond $1,$ but received your desired ACY for Bond $2.$