u Problem 6-17 Bond Returns (LO2, 3) 10 polits A bond with a face value of $1.000 has 10 years until maturity, carries a coupon rate of 7.3%, and sells for $1.170. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) Skipped a. If the bond has a yield to maturity of 10.7% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) Price b. What will be the rate of return on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return % c. If the inflation rate during the year is 3%, what is the real rate of return on the bond? (Assume annual interest payments.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Real rate of retum % 2 Problem 6-5 Bond Pricing (L01, 2) A General Power bond carries a coupon rate of 8.1%, has 9 years until maturity, and sells at a yield to maturity of 7.1%. (Assume annual interest payments.) polits a. What interest payments do bondholders receive each year? b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What will happen to the bond price if the yield to maturity falls to 6.1%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. If the yield to maturity falls to 6.1%, will the current yield be less, or more, than the yield to maturity? Answer is complete but not entirely correct. a. a Interest payments $ 81 b. Price $ 1,064.88 Price will rise a e by $ 1,135.44 than yield to maturity. Current yield is more