1. A coupon-paying bond has a current price of $945. Its face value is $1,000. Its $70 coupon is paid just once per year (at the end of each year). There are 2 years left until maturity. What is the bonds yield to maturity? (to the nearest tenth of a percent)
a. 4.6%
b. 2.9%
c. 7.0%
d. 10.2%
2. A bond has three years to maturity. Its coupon rate is 6% and it pays just once per year. Its face value is $1,000. At its yield to maturity of 5%, it is priced at $1,041. Compute the duration of this bond.
a. 1.9
b. 3.7
c. 3.0
d. 2.8
Please show the process