A B I u or Av As TM Ev Ev upit 1. Calculate for the following coupon and zero-coupon bonds. a. The price of a 2-year 1000$ bond with a 5% coupon rate paid semi-annually and a YTM of 4%. b. The ZTM of a 1000$ two-year zero-coupon bond trading at 960$ The price of a 1000$ two-year zero-coupon bond with a 7% YTM d. Which of these bonds would you buy? Explain. c. 2. Suppose you have the following Loans/Investments, your income tax rate is 30% and the Equity loan can be tax deducted, while you need to pay taxes on the money market fund. Credit Card 14.90% APR (Monthly Compounding) Automobile Loan 5.90% APR (Monthly Compounding) Home Equity Loan 8.25% APR (Monthly Compounding) Money Market Fund 5.10% EAR Calculate the after-tax EAR for all four instruments b. If you were thinking of getting a new car and are free to choose among the four funding sources, which one would you pick? Explain