Problem:
A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095.
Required:
Question 1: What is its yield to maturity (YTM)?
Question 2: Assume that the yield to maturity remains constant for the next 2 years. What will the price be 2 years from today?
Note: Explain all calculation and formulas.