4. Suppose today is January 1, 2018, and the investors expect the annual risk-free interest rates in 2018 through 2020 to be:

Year	One-Year Rate (Rrf)
2018	2.2%
2019	1.8
2020	2.9

What is the yield to maturity for Treasury bonds that mature at the end of a) 2019 (i.e., a two year bond) and b) 2020 (i.e., a three-year bond)? Assume the bonds have no risks.

Chapter 7

5. A firms bonds have a maturity of 8 years with a $1,000 par value,, have an 11% coupon rate, are callable in 4 years at $1,154 and currently sell at a price of $1,283.09. Suppose the coupon payments are made quarterly.

a) What is the yield to maturity?

N= I/YR= PMT= FV= PV=

Yield to maturity=

b) What is the yield to call?

N= I/YR= PMT= FV= PV=

Yield to call=