Assume zero-coupon yields on default-free securities are as summarized in the following table:

Maturity(years) 1 2 3

Zero-coupon YTMn 5.0% 5.25% 5.30%

a) What is the price today of a two-year, default-free security with a face value of $1000 and an annual coupon rate of 6%?

b) What is the price today of a two-year, zero-coupon, default-free security with a face value of $1000?

c) What is the price of a three-year, default-free security with a face value of $1000 and an annual coupon rate of 4%? What is the yield to maturity for this bond?