part B only

1. Here is the US Treasury yield curve as of 9/21/23 (rates in percent), which you can assume applies to both zero-coupon (zeroes), and coupon bond payments: a. Using the method discussed in class and the text for replicating a coupon bond using zero-coupon yields, on 9/21/23 what was the price of a risk-free, 3 -year, $1,000 par value bond with 3.25% annual coupons, assuming the first coupon will be paid one year out? (to the cent) [ 7pts ) b. You buy a 30 -year $1000 par value zero and the Fed is not successful in controlling inflation, so that the yield on this specific bond increases to 6.50% in one year. If you decide to sell the bond in one year, what is your total annual return? (tenth of a percent, use the table to lay out your financial calculator inputs or show formula) (7pts)