) A 6-year government bond has a yield to maturity, YTM0, of 3% and a coupon rate of 5%. Suppose that one year later the bond will have an YTM1 of 2%. The face value of bond is $1000.

a) What is the coupon payment?

b) What is the current price of bond (P0)?

c) What is the current yield of the bond now?

d) What is the price of bond one year later (P1)?

e) What is the holding period return, if the bondholder buys the bond at a price of P0 now, and sells it one year later at a price of P1?