All answers must have supporting reasoning.

1. A bond with a face value of $2,000 has a coupon rate of 7.2%. Coupons are paid semi-annually. The next coupon is in four months. What is its price if it is priced at a YTM of 7.2% p. compounded semi-annually?
2. A premium bond that has semi-annual coupons is purchased. It is sold exactly 18 months later at the same YTM as when it was purchased. The selling price is higher than the purchase price. Explain how this could happen.
3. What could account for the YTM of a bond increasing?

A zero coupon bond (a bond that does not have any coupons, only a face value) is traded at a YTM of 5.82%. What is the expected capital gain for this bond?