1) Togo and Balto LTD just issued $2.5 million zero-coupon bonds due in 20 years. The bonds were issued at a yield to maturity of 6.80%. The amount received by T&B is closest to: (Please calculate semi-annual)

a) 1,280,941

b) 656,342

c) 670,679

Calculate to four decimal places before converting to a percentage.

2) Jericho Ireland owns LeGrandeMonde bonds in his portfolio. A recent price quote on the bonds is 92.50. The bonds have 2 1/2 years left to maturity and a coupon rate of 3 3/4%. The yield to maturity at this price is closest to: (Please calculate semi-annual)

a) 7.13%

b) 3.54%

c) 7.08%