1. Suppose there is a bond with a par value of $1,000 that matures in 6 years. Coupon payments are made annually. The coupon rate is 9%. It has a 12% yield to maturity.

a.The annual coupon payments = $

b.The price of the bond today (present value) = $

2. A bond with a par value of $1,000 has a 5% coupon rate. Coupon payments are made semiannually. The last coupon was paid 40 days ago. What is the accrued interest?

3. You buy a 10-year $1,000 par value zero-coupon bond priced to yield 6%. Assume you are going to hold on to the bond until maturity.

a.The price of the bond initially = $

b.The price of the bond after one year = $

c. If you are in a 25% tax bracket, you will owe taxes on this investment after the first year equal to $_______.