1. The ABC Corporation issued a new series of bonds on January 1, 2000. The bonds were sold at par value($1,000), have 8% coupon, and mature in 20 years. Coupon payments are made annually.

a) What was the YTM of the bonds on January 1, 2000?

b) What was the price of the bonds on January 1, 2005, assuming that the level of interest rates fell to 5%?

c) On January 1, 2007 the bonds sold for 1,166.13. What was the YTM at that date?