Problem:
A 8.3 percent coupon bond with 16 years left to maturity is priced to offer a 6.65 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.4 percent.
Required:
Question 1: What would be the total return of the bond in dollars?
Question 2: What would be the total return of the bond in percentage?
Note: Provide support for rationale.