1) Consider a coupon bond that you can buy today. The bond makes coupon payments once a year, in September 20l8, September 20t9, September 2020, and also pays off its face value {or principle) in September 2020. The face value is $500. The coupon rate is 5% {"96" means percent}. You look on your Bloomberg terminal and see that current market yields to maturity for \"zero coupon" {singlepayment) bonds are as follows: 2% for bonds paying off in September 2018 (one year zerocoupon bonds) 8% for bonds paying off in September 2019 (twoyear zerocoupon bonds} 12% for bonds paying off September 2020 (three-year zerocoupon bonds)