The price of one-year, two-year, and three-year zero coupon Treasury bond are currently $980, $860, and $780 respectively. The government plans to issue a new three-year annual coupon bond with a coupon rate of 4%. Face value of all the bonds are $1000. What is the fair price of the new coupon bond? (answer should be $884.8)

What is the yield to maturity of the coupon bond in the previous question, assuming compounded annually?

8.63%

7.83%

2.04%

8.51%

4%