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Part $1$

Consider the following information from the close of trading on November$24,2020$ for a coupon bond with a face value of

$$$$1$ comma $0001,000$

and a maturity date of

October $22$ comma $2022$October$22,2022$:

Coupon$$ rate:

$5\mathrm{.}055\mathrm{.}05\%$

$$Price:

$$$$1$ comma $0741,074$

Yield to$$ maturity:

$1\mathrm{.}11\mathrm{.}1\%$

The$$ bond's current yield was

$4\mathrm{.}704\mathrm{.}70\%.$

$($Round

your response to two decimal

places.$)$

Part $2$

Why is the$$ bond's yield to maturity less than its coupon$$ rate?