You buy a bond for $940 that has a coupon rate of 5.0% and a 5-year maturity. A year later, the bond price is $1,040. (Assume a face value of $1,000 and annual coupon payments.)
a. What is the new yield to maturity on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Yield to maturity %
b. What is your rate of return over the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Rate of return %