Question: 2. Consider a 10-year zero coupon bond with a face amount of $6,000 and an annually compounded yield of 3%? a. What is its price?

2. Consider a 10-year zero coupon bond with a face amount of $6,000 and an annually compounded yield of 3%? a. What is its price? b. What is the annual holding period return if you hold the bond to maturity? c. What will the price of the bond be in 1 year if the yield rises to 5%? Drops to 2%? d. What will the holding period returns be on the bond in the two circumstances described in part (c) above if you sell them in 1 year

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