Decimal places (when relevant): please keep 2 in all calculations. For interest rates, keep 2 digits in the form of 3.xx% unless otherwise specified.

PLEASE SHOW ALL WORK! WITHOUT FINANCIAL CALCULATOR and NO EXCEL

If you are not going to answer all the parts to the question please leave it for someone else. THANKS

2. a. Suppose a ten-year, $1,000 bond with semiannual coupons has a price of $1,077.95 and yield to maturity of 5%. What is the bond's coupon rate?

b. Suppose a ten-year, $1,000 bond with a 7% coupon rate and semiannual coupons is trading for a price of $1,074.39. What is the YTM on the bonds? (Write down the expression for YTM and then use a financial calculator or a spreadsheet program to find the answer)

c. Consider a five-year bond with 7.5 percent annual coupon, currently selling at par. Your estimate of its yield to maturity a year from today is 7.5% per year. Suppose you plan to sell your bond at the end of one year, right after receiving your coupon payment. What is your expected return on bond investment?