he Slice & Dice Investment Co. needs some help understanding the intricacies of bond pricing. It has observed the following prices for zero coupon bonds that have no risk of default: Maturity Price per $1 Face Value 1 year $0.97 2 years 0.90 3 years 0.81 How much should Slice & Dice be willing to pay for a three-year bond that pays a 6-percent coupon, assuming annual coupon payments start one year from now? What is the yield to maturity of the three-year coupon bond? Suppose Slice & Dice purchases this coupon bond and then un-bundles it into its four component cash flows: three coupon payments and the par value amount. At what price(s) can Slice & Dice resell each of the first three cash flows (the coupon payments) today? The remaining cash flow (the face value amount) is a synthetic three-year, zero coupon bond. How much must this strip bond be sold for if Slice & Dice is to break even on the investment? What is the yield to maturity on the synthetic three-year, zero-coupon bond? Why are the answers for parts b and e different?

P.S- Solve using financial calculator