A and B are two Treasury bonds with a maturity of 3 years and a par value of $1000. The annual coupon rate is 2% for A and is 10% for B. Suppose there are two coupon payments a year. The annualized spot rates are as follows (20 points):

Years from now	Annualized spot rate
.5	5%
1	6%
1.5	7%
2	8%
2.5	9%
3	2%

1. Calculate the prices for both bonds A and B. 2. Calculate the annualized YTM for both bonds A and B. 3. Do bonds A and B have the same YTM, and why? 4. C and D are zero coupon bonds with a maturity of 2 years and a par value of $1000. Should bonds C and D have the same YTM? Explain.