1.Suppose we use the following spot rate curve to price a 2-year coupon-paying bond with a coupon rate of 5% and a face value of $1,000.

6-month: 2.0% 12-month: 2.3% 18-month: 3.1% 2-year: 3.3%

Which of the following rate will the resulting YTM be the closest to?

a.6.6%

b.2.0%

c.3.3%

d.1.8%

e. 2.3%

2.A bond with a coupon rate of 4% and a face value of $100. Coupons are paid semi-annually. Suppose there are 67 days to the next coupon payment date. If a bond dealer quotes you a price of 98 today, then what is the price you would have to pay to purchase this bond today?

Assume a 30/360 day-count convention, and semi-annual compounding.

Round your answer to the nearest cent (2 decimal places).