$1.(3$ points$)$ Assume that a bond will make payments every six months in the amount of $$20,$

starting six months from today. At the end of the bond$$s life, which is $20$ periods from today, it

will return a principal amount of $$1,000.$

a$.$ What is the maturity of the bond $($in years$)?$

b$.$ What is the coupon rate $($in percent$)?$

c$.$ What is the face value of the bond? $($Note: same as the principal$)$

$2.(7$ points$)$ Suppose a $10-$year $$1,000$ bond with an $8\%$ coupon rate and semiannual coupons is

trading for $$1,034\mathrm{.}74.$

a$.$ What is the bond$$s yield to maturity $($expressed as an APR with semiannual

compounding$)?$

b$.$ If the bond$$s yield changes to $9\%$ APR, what will the bond$$s price be$?$

$3.(5$ points$)$ Suppose a five$-$year, $$1,000$ bond with annual coupons has a price of $$900$ and a yield

to maturity of $6\%.$ What is the bond$$s coupon rate?

$4.(7$ points$)$ Suppose a seven$-$year, $$1,000$ bond with an $8\%$ coupon rate and semiannual coupons

is trading with a yield to maturity of $6\mathrm{.}75\%.$

a$.$ Is this bond currently trading at a discount, at par, or at a premium? Briefly explain how

you would know this even if you didn$$t calculate the bond$$s price.

b$.$ If the yield to maturity of the bond rises to $7\%($APR with semiannual compounding$),$

what price will the bond trade for?

$5.(8$ points$)$ Suppose you purchase a $10-$year bond with $6\%$ annual coupons. You hold the bond for

four years and sell it immediately after receiving the fourth coupon. If the bond$$s yield to

maturity was $5\%$ when you purchased and sold the bond, what cash flows will you pay and

receive from your investment in the bond per $$1,000$ face value?