[No Excel please, try to learn from the test and need step-by-step calculation. Thank you so much!]

Q1. Exactly 2 years ago, you purchased at par a 10-year, 10 percent semi-annual coupon bond, with a face value of $1,000. Today. The market rate of interest is 6%.

(a). What was the market rate of interest (discount rate) at the time you purchased the bond?

(b). Suppose you wish to sell the bond today, how much can you sell it for?

(c). What is your rate of return on the bond if all coupons were reinvested in your bank account, which pays 1% interest per year until the bond is sold 2 years after owning it?