1. A bond has a $1,000 face value, 18 years to maturity, and 7.6 percent coupon rate with coupons paid annually. The bond is selling today for $980. If the yield to maturity of the bonds remains constant for the next seven years, what will the price of the bond be 7 years from today? Please show some work
2. A 7-year, 5 percent coupon bond has a yield to maturity of 4 percent. A portfolio manager with a four-year horizon needs to forecast the total return on the bond over the coming four years. In four years, the yield to maturity on this bond is expected to be 5 percent and the coupon payments can be reinvested in short term securities at a rate of 2, 2.5,3, and 3.5 percent respectively for the next four years. Calculate the estimated annualized return based on these predictions.