Problem 1: An AT&T bond has 10 years until maturity, a coupon rate of 8 percent, and sells for $1,100. If the AT&T bond has a yield to maturity of 8 percent 1 year from now, what will its price be?
Problem 2: What will be the rate of return on the bond?
Problem 3: If the inflation rate during the year is 3 percent, what is the real rate of return on the bond?