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13. Suppose STRIPS yields for maturities of 0.5, 1, 1.5, and 2 years are currently 2%, 2%, 3%, and 3%. Which of the following is
13. Suppose STRIPS yields for maturities of 0.5, 1, 1.5, and 2 years are currently 2%, 2%, 3%, and 3%. Which of the following is closest to the price of a $100-face value, 2-year, 4% coupon bond that pays semi-annual coupons currently? (a) $101 (b) $102 (c) $103 (d) $104 14. You buy the bond in problem 13. In exactly one year, the yield-to-maturity goes becomes 2%. Which of the following describes the bond's return over this year? (a) The bond does not change in value (b) Not enough information (c) The bond's return will be positive, but less than 2% (d) The bond's return will exceed 2% (e) The bond decreases in value
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