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Suppose you buy a three year zero coupon bond with a current yield to maturity of 5%. The face value of the bond is $1,000.

  1. Suppose you buy a three year zero coupon bond with a current yield to maturity of 5%. The face value of the bond is $1,000. A year later, the yield to maturity is 4%. What is the one year holding period return on the bond?

  2. Suppose you buy a three year coupon bond with a current yield to maturity of 5%. The face value of the bond is $1,000. The bond pays annual coupons, and the coupon rate is 6%. A year later, the yield to maturity is 4%. What is the one year holding period return on the bond?.

  3. Suppose a one year zero coupon bond has a yield to maturity of 5%, and a two year zero coupon bond has a yield to maturity of 6%. What is the implied one year forward rate?

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