1.A corporate bond has the face value of $1,000, the remaining maturity of two years and pays interest semi-annually. Today is January 25, 2019, and this bond paid interest this morning. Suppose the annual coupon rate denoted by C, and the annual yield-to-maturity of the bond, denoted by K, are determined as follows: (where X is the annualized 3-months treasury bill rate at the beginning of each payment period)

C=X +.015, and

K=X +.02

i)Today the annualized 3-month treasury bill rate is 2.5% on July 25, 2019, January 25, 2020 and July 25, 2020, it is expected to be 3%, 4% and 4.5% respectively. Find the current price of the bond.