answer to two decimal places (e.g.. 1. (a) Suppose a 6 percent coupon, $1,000 bond with eight years left to maturity is selling for $1,100. What is the yield, assuming that interest is paid quarterly? (3 marks) (b) If, in part (a), the 6 percent coupon was paid semi-annually on the bond, what would the bond sell for given that the annual yield remained unchanged [ie., the investor wants the same annual yield as in (a)]? (2 mark) (C) If, in part (a), the 6 percent coupon was paid monthly on the bond, what would the bond sell for, given that the effective annual yield remained unchanged [i.e., the investor wants the same effective annual yield as in (a)]? (2 marks) 2. A firm has just issued on January 1, 2019) a bond that has a face value of $1,000, a coupon rate of 6 percent paid semi-annually (on June 30 and December 31), and matures in 8 years. The bonds were issued with a yield to maturity of 7%. What price were the bonds issued at? Assume that on July 1, 2021, the bond trades to earn an effective annual yield of 8%. At what price should this bond be trading for on July 1, 2021? (5 marks) PRICE WHEN ISSUED: PRICE ON JULY 1, 2021: answer to two decimal places (e.g.. 1. (a) Suppose a 6 percent coupon, $1,000 bond with eight years left to maturity is selling for $1,100. What is the yield, assuming that interest is paid quarterly? (3 marks) (b) If, in part (a), the 6 percent coupon was paid semi-annually on the bond, what would the bond sell for given that the annual yield remained unchanged [ie., the investor wants the same annual yield as in (a)]? (2 mark) (C) If, in part (a), the 6 percent coupon was paid monthly on the bond, what would the bond sell for, given that the effective annual yield remained unchanged [i.e., the investor wants the same effective annual yield as in (a)]? (2 marks) 2. A firm has just issued on January 1, 2019) a bond that has a face value of $1,000, a coupon rate of 6 percent paid semi-annually (on June 30 and December 31), and matures in 8 years. The bonds were issued with a yield to maturity of 7%. What price were the bonds issued at? Assume that on July 1, 2021, the bond trades to earn an effective annual yield of 8%. At what price should this bond be trading for on July 1, 2021? (5 marks) PRICE WHEN ISSUED: PRICE ON JULY 1, 2021