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I will give a thumbs up if you can solve the 3 questions thank you Chapter 11 - Bond Prices 1. The US Treasury issues

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Chapter 11 - Bond Prices 1. The US Treasury issues a $10,000 one-year bond bearing a 5% rate of interest. a) What is the income stream from the bond? b) The Federal Reserve executes contractionary monetary policy and market rates rise to 5.5%. What is the price of the bond in the secondary market? c) The FED reverses course in the face of a slowing US economy. It undertakes expansionary monetary actions and market rates fall to 4.5%. What will be the price of the bond in the secondary market at the 4.5% level? d) At the end of the year, how much will the bearer of the bond receive when it is redeemed? II. Assume a $3,000 one-year bond with a 12% rate of interest. a. What is the yield? b. If market rates rise to 15%, what is the price of the bond? If rates fall to 10% what is the price of the bond? d. At the end of the year, how much will the bearer of the bond receive when it is redeemed? C. III. Assume a $100,000 bond with an 8% rate of interest. a. What is the yield? b. If market rates rise to 15%, what is the price of the bond? If rates fall to 10% what is the price of the bond? d. At the end of the year, how much will the bearer of the bond receive when it is redeemed? C

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