Pelzer Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds have a...

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Pelzer Printing Inc. has bonds outstanding with 10 years left tomaturity. The bonds have a 9% annual coupon rate and were issued 1year ago at their par value of $1,000. However, due to changes ininterest rates, the bond's market price has fallen to $950.70. Thecapital gains yield last year was -4.93%.
What is the yield to maturity? Do not round intermediatecalculations. Round your answer to two decimal places.
    %
For the coming year, what are the expected current and capitalgains yields? (Hint: Refer to Footnote 6 for the definition of thecurrent yield and to Table 7.1.) Do not round intermediatecalculations. Round your answers to two decimal places.
Expected current yield:   %
Expected capital gains yield:   %
Will the actual realized yields be equal to the expected yieldsif interest rates change? If not, how will they differ?
As rates change they will cause the end-of-year price to changeand thus the realized capital gains yield to change. As a result,the realized return to investors will differ from the YTM.
As long as promised coupon payments are made, the current yieldwill change as a result of changing interest rates. However,changing rates will cause the price to change and as a result, therealized return to investors will differ from the YTM.
As long as promised coupon payments are made, the current yieldwill not change as a result of changing interest rates. However,changing rates will cause the price to change and as a result, therealized return to investors should equal the YTM.
As long as promised coupon payments are made, the current yieldwill change as a result of changing interest rates. However,changing rates will cause the price to change and as a result, therealized return to investors should equal the YTM.
As long as promised coupon payments are made, the current yieldwill change as a result of changing interest rates. However,changing rates will not cause the price to change and as a result,the realized return to investors should equal the YTM.

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Pelzer Printing Inc. has bonds outstanding with 10 years left tomaturity. The bonds have a 9% annual coupon rate and were issued 1year ago at their par value of $1,000. However, due to changes ininterest rates, the bond's market price has fallen to $950.70. Thecapital gains yield last year was -4.93%.What is the yield to maturity? Do not round intermediatecalculations. Round your answer to two decimal places. %For the coming year, what are the expected current and capitalgains yields? (Hint: Refer to Footnote 6 for the definition of thecurrent yield and to Table 7.1.) Do not round intermediatecalculations. Round your answers to two decimal places.Expected current yield: %Expected capital gains yield: %Will the actual realized yields be equal to the expected yieldsif interest rates change? If not, how will they differ?As rates change they will cause the end-of-year price to changeand thus the realized capital gains yield to change. As a result,the realized return to investors will differ from the YTM.As long as promised coupon payments are made, the current yieldwill change as a result of changing interest rates. However,changing rates will cause the price to change and as a result, therealized return to investors will differ from the YTM.As long as promised coupon payments are made, the current yieldwill not change as a result of changing interest rates. However,changing rates will cause the price to change and as a result, therealized return to investors should equal the YTM.As long as promised coupon payments are made, the current yieldwill change as a result of changing interest rates. However,changing rates will cause the price to change and as a result, therealized return to investors should equal the YTM.As long as promised coupon payments are made, the current yieldwill change as a result of changing interest rates. However,changing rates will not cause the price to change and as a result,the realized return to investors should equal the YTM.