Spot Rates and Yield to Maturity Assume that the spot rates are r1=0.03 for the first year and r2=0.04 for the second year. Mr. Z, an investor, calculated the yleld to maturity (YTM) of a 2-year bond that pays $1 at the end of the first year and $1 at the end of the second year. Subsequently, he used this YTM to determine the price of another two-year bond with a face value of $1000 and an annual coupon rate of 4% Based on this method, Mr. Z's pricing of the bond: Multiple Choice Underestmates the bond's value Orerestimptes the bond's valve Presisely pins down the bands volve There is not enough information to determine either of the options (a)(c)