Question: 0 3. (5 marks) Consider a four-year bond with face value F = 1000 and coupon rate c = 10% paid semi-annually. Answer the following

0 3. (5 marks) Consider a four-year bond with face value F = 1000 and coupon rate c = 10% paid semi-annually. Answer the following questions: a. (2) Compute the yield to maturity on this bond if it is traded at a price of B = 900. b. (1) Explain the meaning of speculation and how it is related to the bond pricing rule. C. (2) Suppose you bought the bond at the end of year 3. How much would you pay for this bond if the market interest rate is 4%

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