1. i) A 5 year semiannual coupon bond with a face value of $1000 trades at $878. The market-determined discount rate is 6%. What is the coupon rate? Answer in percent and round to two decimal places.

ii) A zero coupon bond with a face value of $1000 that matures in 18 years sells today for $558. What is the yield to maturity? (Use annual compounding.) Enter in percent to two decimal places.

iii) Which of the following is true of longer maturity bonds?

a)They tend to have negative yields.b)There is no relationship between maturity and yield.c)They generally have higher yields than bonds with shorter maturities.d)They generally have lower yields than bonds with shorter maturities.