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A 3-year US Treasury note with a face value of $100 pays a coupon of 4% (2% of face value every six months). The reported
A 3-year US Treasury note with a face value of $100 pays a coupon of 4% (2% of face value every six months). The reported yield to maturity is 2% (a six-month discount rate of 2/2 = 1%). a. This bond is a (Click to select) b. What is the price of the bond? (Do not round intermediate calculations. Enter your answer without a $ sign, rounded to 2 decimal places.) c. One year after you purchased the bond, the yield to maturity increases to 4% (a six-month discount rate of 4/2= 2%), what will be the price of the bond one year later? (hint: now the bond has 2 years to maturity and 4 more semiannual coupon payments) (Do not round intermediate calculations. Enter your answer without a $ sign, rounded to 2 decimal places.) b. Bond price c. Price t=1
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