eBook Chapter 12 Financial Planning Exercise 15 Calculating current yield and return on investment Assume that an investor pays $900 for a long-term bond that carries a 9% coupon. During the next 12 months, interest rates drop sharply, and the investor sells the bond at a price of $962.50. Assume that bond's par value is $1,000 and use annual compounding of interest. Find the current yield that existed on this bond at the beginning of the year. Round the answer to two decimal places. % What was it by the end of the 1-year holding period? Round the answer to two decimal places. % Compute the return on this investment using the approximate yield formula and a 1-year investment period. Do not round intermediate calculations. Round the answer to two decimal places.