An Fl manager purchases a zero-coupon bond that has two years to maturity. The manager paid $826.45 per $1,000 for the bond. (a) What is the yield to maturity for the two-year bond if held to maturity? (b) The current yield on a one-year bond of equal risk is 9 percent, and the one- year rate in one year is expected to be either 11.60 percent or 10.40 percent. Either rate is equally probable. Given the expected one-year rates in one year, what are the possible bond prices in one year? (c)If the manager buys a one-year option with an exercise price equal to the expected price of the bond in one year, what will be the exercise price of the option? (d) Should the manager buy a Call option or a Put Option? (e) If interest rates do not change. i.e. Stay at 9%, what is the price of the bond and will the manager exercise the put option? UTML Editor