Part I: 

Below is the nominal rate on 10-year U.S. Treasury bonds were each of the following on the below dates

1. At 04/1954: 2.29 

2. At 09/1976: 7.59 

3. At 09/1981: 15.32 

4.8/2015 2.17 

 A. Assume that a $1000 U.S. Treasury bond was purchased at par on each of first three dates above. Also assume that for each of the three bonds the reported nominal rate that is listed was the coupon rate at issuance. 

Assuming semi-annual coupon payments, calculate the value of each bond after 5

years based on the then 5-year nominal rates on U.S. Treasuries available at http://www.federalreserve.gov/releases/h15/data.htm to determine the gain or loss on each of the three bonds after 5 years?

 1. At 04/1959: ________ 

 2. At 09/1981: ________ 

 3. At 09/1986: ________ 

 Which bond would you have preferred to purchase? 

 04/1954? ________ 

 09/1976? ________ 

 09/1981? ________ 

Why?