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Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) 1 Price of $1,000 Par Bond (Zero-Coupon) $966.78 894.28 803.54 3

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Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) 1 Price of $1,000 Par Bond (Zero-Coupon) $966.78 894.28 803.54 3 a. A 6.4% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? (Round your answer to 2 decimal places.) * Answer is complete but not entirely correct. Yield to maturity 15.00 % b. If at the end of the first year the yield curve flattens out at 8.1%, what will be the 1-year holding-period return on the coupon bond? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Holding-period return 969.73 % %

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