1. Suppose a 10 year, $1000 bond with an 8.6% coupon rate and semiannual coupons is trading for $1034.66
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding?)
b. If the bond's yield to maturity changes to 9.3% APR, what will be the bond's price?
2. The current zero coupon yield curve for risk free bonds is as follows:
Maturity (Years) 1 2 3 4 5
YTM 5.02% 5.51% 5.79% 5.92% 6.02%
What is the price per $100 face value of a 2 year, zero coupon, risk-free bond?