1. In February 2015 Treasury 4 1/8s of 2038 offered a semiannually compounded yield to maturity of 2.92%. Recognizing that coupons are paid semiannually, calculate the bond's price. Assume face value is $1,000. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Bond price $
2. A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 4.5% and Baa bonds yield 5.5%. Assume a 10% five-year bond with annual coupons and a face value of $1,000. (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. What is the bond's price if it is rated as Aaa? Bond price $ b. What is the bond's price if it is rated as Baa? Bond price $