Question: 3. Bond E has the following features: Face value = $1,000, Coupon Rate = 8%, Maturity = 5 years, Yearly coupons The market interest rate

3.

Bond E has the following features:

Face value = $1,000, Coupon Rate = 8%,

Maturity = 5 years, Yearly coupons

The market interest rate is 3.74%

If interest rate remains at 3.74% for the life of the bond (i.e., 3.74 years), what is the price of Bond E in year 4?

4.

What is the price of a bond with the following features?

  • Face Value = $1,000
  • Coupon Rate = 8% (stated as an ANNUAL rate)
  • Semiannual coupon payments
  • Maturity = 8 years
  • YTM = 6.36% (Stated as an APR)

State your answer to the nearest penny (e.g., 984.25)

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