Q1

A) A two-year bond with par value $1,000 making annual coupon payments of $98 is priced at $1,000. What is the yield to maturity of the bond? (Round your answer to 4 decimal place.)

B) A two-year bond with par value $1,000 making annual coupon payments of $98 is priced at $1,000.

What will be the realized compound yield to maturity if the one-year interest rate next year turns out to be 7.8%

(Do not round intermediate calculations. Round your answers to 4 decimal places.)