Question: 1. Bond A has the following features: Face value = $1,000, Coupon Rate = 4%, Maturity = 8 years, Yearly coupons The market interest rate

1.

Bond A has the following features:

Face value = $1,000,

Coupon Rate = 4%,

Maturity = 8 years, Yearly coupons

The market interest rate is 5.77%

If interest rates remain at 5.77%, what will the price of bond A be in year 1?

2.

How much would you pay today for a bond that has a face value of $1,000, and annual coupon of $63 and a maturity of 5 years? (=what is the price of the bond?)

The annual interest rate is 6.04%?

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