The following is a list of prices for zero coupon bonds with different maturities and par value of $1,000.

Maturity year 1 = $943.40

Maturity year 2 = $881.68

Maturity year 3 = $808.88

Maturity year 4 = $742.09

a) What are the 4 spot rates or zero yields?

b) What is the price of a $1000-par, 4-year maturity bond with a 12% coupon rate paid annually?

c) What is the yield to maturity (YTM) of this bond?

d) What is the price of the bond in the previous problem expected to be a year from today? (Hint: An investor must earn the one-year rate during the first year).