Three investors invest in the same 10-year 8% annual coupon bond. They bought the bond at the same price ($85.5030 for a par value of $100) and at the same time. A is a buy-and-hold investor (hold till maturity), B will sell the bond after four years, and C will sell the bond after seven years. 1. What is the yield to maturity of this bond at the time of purchase? I/y =10.4 2. After the bond is purchased by the three investors and before the first coupon is received, the interest rate drops to 9.4%. Calculate: i. What is the change in IOI for each investor? (Hint: Find the difference between the IOI under the original YTM and the IOI under the new yield). ii. What is the capital gain/loss for each investor? (Hint: capital gain/loss = price at sale or maturity - price carrying. Carrying value is the hypothetic price of the bond if the bond's yield remains at the initial yield to maturity.) iii. What is each investor's net gain or loss after the interest rate change