You have just bought a five-year zero-coupon Treasury bond for $950 per $1000 face value.

(a)What is the annually compounded yield to maturity on the bond?

(b)Suppose the yield to maturity on comparable zeros increases to 2% immediately after purchasing the bond and remains there. Calculate the annual holding period return if you sell the bond after one year.

(c)What is the annually compounded yield to maturity on the bond one year after the original purchase?

(d)Suppose after one year you instead hold the bond to maturity. What is the annualized holding period return for the five year investment?