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3. Suppose you purchase a U.S. Treasury Bond with a face-value of $2,500 and a 10-year maturity for a price of $1,000. (a) What is
3. Suppose you purchase a U.S. Treasury Bond with a face-value of $2,500 and a 10-year maturity for a price of $1,000. (a) What is the yield-to-maturity on this bond? (b) If the interest rate were to decrease by 1% in the second year of holding the bond, what is the new price of the U.S. Treasury bond? (c) Given the above answer, what is the capital gain/loss if you were to sell the bond in year 2
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