1. Consider a coupon bond maturing in two years with a par value of $100. The yield to maturity is currently higher than the coupon rate. If interest rates remain constant, one year from now the price of this bond will be:

a. $100

b. higher than it currently is

c. lower than it currently is

d. cannot be determined

e. the same as it currently is

2. Consider a coupon paying bond that has more than one coupon left. Which of the statements below about yield-to-maturity (YTM) is false?

a. Even if an investor decides to hold the bond until maturity, they cannot be sure that the holding period return will be equal to YTM

b. The YTM will depend on its coupon rate but will not depend on its par value

c. The YTM can be greater or less than the coupon rate

d. If the bond is a perpetuity, then we cannot calculate the YTM

e. The YTM is related to the underlying zero rates