Suppose that the term structure is currently flat so that bondsof all maturities have yields to maturity of $10\%.$ Currently a $5-$year couponbond with annual coupons $($with the first one due in $1$ year$)$ and face valueof $$1,000$ is selling at par$\mathrm{.}1.$ What is the current price of the $5-$year bond? What are the annualcoupons in dollar terms?$2.$ A year from now interest rates will depend on the stance of mone$-$tary policy. If monetary policy is tight the yields to maturity on allbonds will be $12\%.$ If monetary policy is loose the yields to maturityon all bonds will be $8\%.$ If you sell the bond a year from now whenmonetary policy is tight what will be the return to your investmentover the year? If you sell the bond a year from now when monetarypolicy is loose what will be the return to your investment over the year?