Problem 4. (Assume par value for all bonds to be $1,000 unless specified otherwise)

a. What is the YTM on a 15-year zero-coupon bond that currently sell for 65 percent of par value?

b. Megathon Inc has bonds which have 8 years remaining to maturity, a YTM of 5.1 percent,

and a current price of $964. The bonds make semiannual payments. What must the coupon rate be on these bonds?

c. What is the price of a 25-year, 6% coupon bond, assuming semiannual interest payments, if the YTM is 6.3% ?