Hooper Printing Inc. has bonds outstanding with 9 years left to
maturity. The bonds have an 8% annualcoupon rate and were issued 1
year ago at their par value of $1 ,000. However, due to changes in
interest rates, the bond's market price has fallen to $901.40. The
capital gains yield last year was -9.86%. a. What is the yield to
maturity? b. For the coming year, what are the expected current and
capital gains yields? (Hint: Refer to Footnote 7 for the definition
of the current yield and to Table 7.1.
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