1. Which of the following is true?

a. A zero-coupon bond is worth $0 because ithe coupon rate is 0%.

b A zero-coupon bond must always sell for less than par value.

c Use the perpetuity formula to find the value of a zero-coupon bond.

d A zero coupon bond will always have a higher yield than a coupon-paying bond.

2. A bond matures in 5 years. It has a coupon rate of 9%. The bond pays coupons annually and its yield to maturity is 11%. What is the fair price of the bond?

3. A bond that sells for $1000 pays a semi-annual coupon of $30. What is the bond's yield to maturity? (Convert to a percentage. Enter only numbers and decimals in your response.)