Problem Walkthrough Pelzer Printing Inc. has bonds outstanding with 19 years of to maturity. The bonds have a coupon voted wed 1 year ago the value of $1,000 to changes in interest rates, the band's market price has fallen to $890.20. The capital gains yield last year was 10.90% a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places b. For the coming year, what are the expected current and capital gains ywelds? (Hint: Refer to Footnote for the definition of the current yield and to T7.1.) On the intermediate calculations. Round your answers to two decimal places. Expected current yield: Expected capital gains yield: c. Will the actual realized yields be equal to the expected yields of interest rates change? If not, how will they didler? 1. As long as promised coupon payments are made, the current yield will change as a result of change terest rates. However, changing totus will use the price bech and as a result, the realized return to investors should equal the YTM II. As long as promised coupon payments are made, the current yield will change as a result of changing interest However changing es in the price to change and as a result, the realced return to investors should equal the YIM TIL. As rates change they will cause the end-of-year price to change and thus the red capital gains yield to change. As a result, the reader to best wie the YTM IV. As long as promised coupon payments are made, the current yield will change as a result of changing interest rates. However, changing es will come the proti chung and as a result, the realized return to investors will differ from the YTM V. As long as promised coupon payments are made, the current yield will not change as a result of changing interest rates. However, changing role will cause to change and as a result, the realized return to investors should equal the YTM Select