Consider a five-year, default-free bond with annual coupons of 3% and a face value of $1,000 and assume zero-coupon yields on default-free securities are as summarized in the following table:

Maturity 1 year 2 years 3 years 4 years 5 years

Zero-Coupon Yields 2.00% 2.30% 2.50 % 2.70 % 2.80 %

a. What is the yield to maturity on this bond?

b. If the yield to maturity on this bond increased to 3.20% , what would the new price be?