1. On 12/30/2016, the 10-year Treasury note traded at a yield of 2.51%. For simplicity, assume that the 10-year note pays annual coupons in years 1 through 10 and a principal of$100 in year 10.

(a)Write the equation relating the price of the 10-year Treasury note to its yield. [0.5 points]

(b)Assuming that there is no arbitrage, write the equation that relates the price of the 10-year Treasury note to the zero-coupon yield curve. [0.5 points]

(c)Use the two equations from parts (a) and (b) to compute the coupon rate on the 10-year Treasury note. [1 point]

(d)Is the price of the 10-year Treasury note above or below par (i.e., above or below$100)? [1 point]