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The yield to maturity on 1 - year zero - coupon bonds is currently 6 % ; the YTM on 2 - year zeros is

The yield to maturity on 1-year zero-coupon bonds is currently 6%; the YTM on 2-year zeros is 7%. The Treasury plans to issue a 2-year maturity coupon bond, paying coupons once per year with a coupon rate of 8%. The face value of the bond is $100.Required:At what price will the bond sell?Note: Do not round intermediate calculations. Round your answer to 2 decimal places.What will the yield to maturity on the bond be?Note: Do not round intermediate calculations. Round your answer to 3 decimal places.If the expectations theory of the yield curve is correct, what is the market expectation of the price for which the bond will sell next year?Note: Do not round intermediate calculations. Round your answer to 2 decimal places.Recalculate your answer to part (c) if you believe in the liquidity preference theory and you believe that the liquidity premium is 2.5%.Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

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