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2. You own a $1,000-par zero-coupon bond that has 5 years of remaining maturity. You plan on selling the bond in one year and
2. You own a $1,000-par zero-coupon bond that has 5 years of remaining maturity. You plan on selling the bond in one year and believe that the required yield next year will have the following probability distribution: Probability Required Yield 0.1 6.60% 0.2 6.75% 0.4 7.00% 0.2 7.20% 0.1 7.45% a. What is your expected price when you sell the bond? b. What is the standard deviation?
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