(Bond market) There are three bonds in the market as follows:

1. A bond with 4% coupon rate (paid annually), 10 years to maturity, and $1,000 face value

2. A bond with 4% plus current (short) rate (paid annually), 10 years to maturity, and $1,000 face value

3. A bond with 8% minus current (short) rate (paid annually), 10 years to maturity, and $1,000 face value

The prices of the bonds are $950, $1,100, and $900, respectively.

(a) Derive the price of a zero-coupon bond with 10 years to maturity and $1,000 face value.

(b) Derive the price of a floating-rate bond (coupon paid annually) with 10 years to maturity and $1,000 face value.

I do not understand how bond prices are derived from other bonds- if you can help me with this question, it would be a great help!