Question: Cindy will make a 2-year investment using two consecutive 1-year $500,000 zero coupon bond. The maturity proceeds of the first zero coupon bond will be

Cindy will make a 2-year investment using two consecutive 1-year $500,000 zero coupon bond. The maturity proceeds of the first zero coupon bond will be rolled over into the second zero coupon bond. The purchase yields for the two 1-year zero coupon bond will be 2.38% and 4.86% p.a., respectively. Note that any surplus funds after one year can be invested for one year at a rate of 3.86% p.a. a) Calculate the price of first zero coupon bond. Round your answer to four decimal places. b) Calculate the price of second zero coupon bond. Round your answer to four decimal places.

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