1. A bond has three years to maturity, $1,000 par value, 5%percent coupon rate, 8% yield to maturity, and makes semiannual payments. Now assume you plan to buy this bond and hold it only for two years, at which time you will sell it in the market. You believe the bonds yield to maturity will be 9% when you sell the bond in two years. Assuming you are a rational investor, calculate the value of the bond:

1. At the end of its second year.
2. Today.