Bond returns If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this with a simple example of a four-year bond selling at a premium to face value. Now do the same for a four-year bond selling at a discount for convenience, assume annual coupon payments. Bond returns a. An 8%, five-year bond yields 6%. If this yield to maturity remains unchanged, what will be its price one year hence? Assume annual coupon payments and a face value of $1,000 b. What is the total return to an investor who held the bond over this year? c. What can you deduce about the relationship between the bond return over a particular period and the yields to maturity at the start and end of that period