5. Answer question 4 if the market interest rate drops to 5% after 1 year? Page 1 of 3 6. You have just bought a 5 year 10% annual coupon bond with a par value of $ 1000 at a price of $963.04 a 6.1 What is the YTM of the bond? 6.2Immediately after you bought the bond, the market interest rate changed to 8% per year. If the interest rate does not change from this level for the next 5 years, what is the realized compound yield from the bond if you hold it until maturity? 7. The prices of zero coupon bonds (all with face value of $1,000) maturing in years 1, 2, 3 are given below. Time to Maturity 1 2 3 Price 961.54 890.00 816.30 What is the YTM on a risk-free 5% annual coupon bond (face value of $1,000) that matures in three years? 8. Calculate the term structure of interest rates (yl, y2, y3, y4) and implied forward rates (1f1, 2f1, 3/1) based on the following discount bond prices. Maturity 1 2 3 4 Price 961.53 907.03 839.62 762.90 5. Answer question 4 if the market interest rate drops to 5% after 1 year? Page 1 of 3 6. You have just bought a 5 year 10% annual coupon bond with a par value of $ 1000 at a price of $963.04 a 6.1 What is the YTM of the bond? 6.2Immediately after you bought the bond, the market interest rate changed to 8% per year. If the interest rate does not change from this level for the next 5 years, what is the realized compound yield from the bond if you hold it until maturity? 7. The prices of zero coupon bonds (all with face value of $1,000) maturing in years 1, 2, 3 are given below. Time to Maturity 1 2 3 Price 961.54 890.00 816.30 What is the YTM on a risk-free 5% annual coupon bond (face value of $1,000) that matures in three years? 8. Calculate the term structure of interest rates (yl, y2, y3, y4) and implied forward rates (1f1, 2f1, 3/1) based on the following discount bond prices. Maturity 1 2 3 4 Price 961.53 907.03 839.62 762.90