$(10$ marks$)$ This question is about coupon bonds $($with principal repayment$)$ as in the text, assume that

the coupon is paid annually. The Bank of Canada lists the following data for Canada bonds as of

January $22,2018.$

Canada Coupon Rate$\%$ Yield Change $\%$

$2$ Year $1\mathrm{.}251\mathrm{.}81-0\mathrm{.}01$

$10$ Year $1\mathrm{.}002\mathrm{.}24-0\mathrm{.}06$

$($a$)$ Use the coupon rate and yield to maturity to calculate the prices for the two bonds. Note the

face value is not given. Most bond quotes are for $$100,000.$ To make things simple assume the

face value is $100.($Then the price could be interpreted as the percentage of the face value.$)$

$($b$)$ What was price of the $10-$year bond on the previous day? What is the one day holding period

return $($assuming no dividend is paid or imputed from Jan $21$ to Jan $22)?$ Note: the column

Change is the change in yield from the previous day.$($c$)$ Now consider a $5-$year bond with yield $2\mathrm{.}03$ and price $95\mathrm{.}4($as a percentage of par; i$.$e$.$ face

value$).$ What is the coupon $($as a percentage of par$)?$

$($d$)$ Calculate the current yield for the two bonds in the table