Assume that two U.S. Treasury securities were purchased at par ($1000) on your selected date five years ago: 1) a 10-year T-note and 2) a 20-year T-bond. Also assume that for each of the two securities the reported nominal rate that you found above was the coupon rate at issuance.

Assuming semi-annual coupon payments, calculate the value of each bond today after 5 years based on the current 5-year Treasury constant maturity nominal rate for the original 10-year note and a current 15-year rate (assume it is the average of the current Treasury constant maturity nominal 10- and 20-year rates) for the original 20-year bond at http://www.federalreserve.gov/releases/h15/data.htm.

a)Complete the following tables (see example below):

Assume that two US. Treasury securities were purchased at par {51(100} In yIur selected date ve years ago: 1] a l~year Tnote and 2} a 20year T boncl. Also assume that for each of the two securities the reported nominal rate that you found above was the coupon rate at issuance. Assuming semi-annual coupon payments, calculate the value of each bond toclay after 5 years based on the current 5year Treasury constant maturity nominal rate forthe original 10year note and a current 15year rate [assume it is the average of the current Treasury constant maturity nominal 1D- and 20-year rates} for the original 21'} year bond at httpaiiwww.t"ederalneserveaggulviireleases;i h15idata.htm. Complete the following tables {see example below}: litYear Bond Purchased for 51mm 5 Years Ago C'ri'al 11.i'alue $IEIEID Coupon Rate (me table you completed above at l.915%= 33% the chosen date from 5 years agoI the original 1D- year Nominal Tbond Rate divided by 2 for semi- Current 5 -Year Yield to Maturity {The most recent 2.33%;\"2= 1.44% 5year Nominal Tnote Rate reported at the Fed site Number of Semi -Anriual Periods Remain u - _ Gain orLoss ontheElond overthe5 ears Coupon Rate (me table you completed above at 2.73%= 1.365% the chosen date from 5 years agoI the original 2i} year Nominal Thond Rate divided by 2 for semi Current 15 Year Yield to Maturity {Take_ the_ 5.D35"m"2= 1.515% m ofthe most recent 10 and Ellyear Nominal Thond Rates reported at the Fed siteI and then divide this average rate by 2 for semi-annual Number of Semi -Annual Periods Remain u - Gain orLoss ontheBond overthe5 ears 1 1 gun\" + icon 1' (1+i)\" *Current Value = Wilda-cl. = Coupon Payment