Suppose the Dutch government issued a bond with 20 years until maturity, a face value of 1000 and a coupon rate of 10% paid annually. The yield to maturity when the bond was issued was 5%.

1. What was the present value of the coupons when the bond was issued?

2. What was the present value of the bond when it was issued?

3. Assuming the yield to maturity remains constant, what is the price of the bond

   immediately before it makes the first coupon payment?

4. Assuming the yield to maturity remains constant, what is the price of the bond

   immediately after it makes the first payment?