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. Consider a bond with a 4% annual coupon and a face value of $1,000. State that w, x, y and z are greater than,

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. Consider a bond with a 4% annual coupon and a face value of $1,000. State that w, x, y and z are greater than, equal to or smaller than $1,000. Also, order w, x, y and z from the highest to the lowest. Years to Maturity Yield to Maturity Current Price 5% W 2 3 3% 2% 3 . Given the current price x for the two-year maturity bond, provide an equation to compute the rate of return of the bond from today to next year assuming that the market interest rate in the next year is 10%(Hint: For this, you should derive a formula for the next period price of the two-year maturity bond considering the change in market interest rates although you do not need to calculate it.)

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