1. A 20-year , annual coupon bond with one year left to maturity has the same interest rate risk as a 10-year, annual coupon bond with one year left to maturity. Both bonds are of equal risk, have the same coupon rate , so the prices of the two bonds are equal.
2. A bond that matures in 8 years sells for $960. The bond has a face value of $1,000 and a 9 percent annual coupon. What is the bond's current yield? What is the bond's YTM? Assume that the YTM remains the same for the next three years, what will be the price of the bond 3 years from today?