1. The following information about a bond is provided:

• Par value, $1,000
• Annual coupon rate, 4%
• Bond pays interest semiannually
• The bond is 10 years from maturity
• The market rate for bonds of equivalent risk is 5%

a) What is the bonds price when rounded to the nearest whole cent?

b) If the bonds price today is $900.45, what is the bond's yield to maturity in decimal form when rounded to the nearest 0.001?

c) If the yield to maturity on bonds of similar risk is 3.6%, the above bond will sell at which of the following: Par value, Discount, Premium, or Cannot be determined.