1.Below is a list of prices for $1,000-par zero-coupon Treasury securities of various maturities. An 11% coupon $100 par bond pays an semi-annual coupon and will mature in 1.5 years. What should be the YTM on the bond? Assume semi-annual interest compounding for this question.

Maturity (periods) Price of $1,000 par bond

1 943.4 2 873.52 3 790

2.Suppose you will go to med school for 4 years beginning in year 5. Tuition is $43,743 per year, due at the end of each year you will be in school. If you want to immunize the interest rate risk associated with the future tuition payments by buying a single issue of a zero coupon bond, then what maturity zero coupon bond should you buy?

Assume a flat yield curve of 0.07, and annual compounding. Round your answer to 2 decimal places.