Coneept $2.$ Price a Bond

Problem $2\mathrm{.}1.8$ pot rates for $1$ and $2$ yasis are $10\%$ and $12\%$ rempectively.

Price a one year wero compes bond whit foee value $$700.$

$P=\frac{565}{\frac{x}{6}}=5636\mathrm{.}36$

Price a two$-$year wero$-$coupon bged with face value $$770.$

Price a two$-$yvar coupon bond'inth facei value $$800$ snd coupon rate $10\%.$ Does it sell at par, at a discount or at a promium?

Problem $2\mathrm{.}2.$ Retimate the pricos of the following bonde, if spot rates are at $7\%$ for each matarity $($Use the annvity formula$)$

Price a $5-$yoar coupon bond with face value $$000$ and coupon rate $8\%.$ Doss it sell at par, at a discount or at a premium? Why?

Pricen a $7-$year coupon bond with face value $$1200$ and coupon rate $6\%.$ Does it sell at par, at a discount or at a premium? Why?

Problem $2\mathrm{.}3$: Suppose that spot rates for $1,2$ and $3$ yoas are at $6\%,9\%$ and $12\%.$

Price a $3-$year coupon bond with face value $$1,000$ and coupoe rate $10\%.$ Does it sell at par, at a dincount or at a presnium? Why?

A $3-$year coupon bond with face value $$500$ and currently sells for $$505\mathrm{.}7.$ What is its coupon rate?