Response to the following questions:
1. What is the value today of a zero-coupon bond with a maturity value of $1,000 and five years remaining to maturity if it is priced to yield:
a. 5%?
b. 8%?
c. 10%?
d. 12%?
e. 14%?
2. The R. T. Ely Corporation issued bonds at par on January 1, 1995, with a face value of $1,000, an original maturity of five years and a coupon rate of 5% (paid annually). What is the price of one Ely bond on January 1, 1998 if Ely bonds are priced to yield 6%?