Question $15$

Two years ago, Bob purchased a $20-$year $$1,000$ par value zero$-$coupon bond for

$$311\mathrm{.}80.$ If today $($with $18$ years to maturity$)$ the bond is priced to yield $5\mathrm{.}20\%,$ what is his

annualized return if he sells the bond?

Hint: Calculate the price of the bond today, and use as FV to calculate the return over $2$

years.

Your answer should be between $4\mathrm{.}02$ and $22\mathrm{.}46,$ rounded to $2$ decimal places, with no

special characters.

Question $16$

A $20-$year, $$1,000$ par value bond has a $7\%$ annual payment coupon. The bond currently

sells for $$870.$ If the yield to maturity remains at the current rate, what will the price be $10$

years from now?