Please show every step in working the problem no calculator please use excel ok. . For the following questions, assume the normal case that coupon payments are semi-annual.

a. What is the yield to maturity on a

15-year,

5.4%

coupon bond if the bond is currently selling for $1,000?

b. For the bond above, suppose that immediately after purchase market rates change to

3.60%.

If you hold the bond for

5

years and then sell it, what is your effective annual return on this investment?

a. The YTM is

3.63.6%

(enter response rounded to decimal places; i.e., x.xx%)

b. Your effective annual return is

nothing%

(enter response rounded to decimal places; i.e., x.xx%)