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It is October 2020, and you are trying to value a 4.2% cobpon bond with par value of $1,000 and a maturity of 2 years.

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It is October 2020, and you are trying to value a 4.2% cobpon bond with par value of $1,000 and a maturity of 2 years. The coupons are semi-annual, with the next coupon payment in exactly 6 months. You have the following information on the yield curve interest rates (APRs, compounded semi-annually) and T-strip prices. Date APR T-strip Jan 2021 99:26 Apr 2021 99:11 July 2021 1.5% Oct 2021 1.7% Jan 2022 97:17 Apr 2022 97:08 July 2022 2.1% Oct 2022 2.2% a. What is the price of this bond? The price of the bond is $(Round to nearest dollar) b. It is one year later (October 2021), and you just received the latest coupon payment. You want to sell the bond now. The YTM of the bond (as an APR. compounded semi-annually) is 3.0%. What is the return that you would earn on this bond? The return would be % (Round your answer to 1 decimal place)

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