A 6-year 4% p.a. Treasury bond (coupon payable half-yearly) is available for purchase at a market yield to maturity of j₂= 2% p.a.

a. Find the bond's price (per $100 face value, rounded to three decimal places) at this yield. Include in your answer

a fully labelled cash flow diagram (drawn from the perspective of the bond issuer),

your chosen valuation date and

an equation of value.

b. Find the bond's price (to three decimal places) 42 days prior to the bond's maturity at a nominal annual yield one hundred and twenty basis points higher than the yield given above. Include in your answer

a fully labelled cash flow diagram (drawn from the perspective of the bond purchaser),

your chosen valuation date and

an equation of value.