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The following is a table showing some information about three different discount bonds and their interest rates. Write down the answers of (to (11) to

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The following is a table showing some information about three different discount bonds and their interest rates. Write down the answers of (to (11) to your answer book and show the steps of your calculation (3 points) Years to (Expected) Liquidity Price YTM maturity Short term rate Premium 1 $980.39 i = 2% = i, = 2% Nil 2 $942.60 izt = 3% i+1 = (i) = lat = 0.5% 3 $889.00 (ii) i3t = = 14+2 = 4% 13t = (iii) = Suppose yield to maturities of discount bonds issued by US Treasury are shown as follows: 1-year 1.9% 2-year 2.6% 3-year 3% Compute the price of the 3-year annual coupon bond with 2.5% coupon issued by China Lobile with face value of $1000. (3 points)

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