1. Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):
- a.What is the maturity of the bond (in years)?
- b.What is the coupon rate (in percent)?
- c.What is the face value?
2. Suppose a 10-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading for a price of $1034.74.
- 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% APR, what will the bond's price be?