1. [12 points] Consider the following debt instruments and calculate the price, the yield to maturity,...

 

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1. [12 points] Consider the following debt instruments and calculate the price, the yield to maturity, or the installment payments as asked in each of the scenarios. a) [4 points] A discount bond with a price of $900, which has a face value of $1,000 and matures in 2 years. What is the yield to maturity of the bond? b) [4 points] A corporate bond with a face value of $10,000, a coupon rate of 10%, a yield to maturity of 5%, and a term to maturity of 3 years. How much would such a bond sell? c) [4 points] A student loan of $5,000 that requires one fixed payment every year for 5 years. The payment starts in two years. The yield to maturity is 6%. How much should be the annual payment? *Note: The first payment will be made in the second year after the initiation of the loan, and the last payment will be made in the 6th year. 1. [12 points] Consider the following debt instruments and calculate the price, the yield to maturity, or the installment payments as asked in each of the scenarios. a) [4 points] A discount bond with a price of $900, which has a face value of $1,000 and matures in 2 years. What is the yield to maturity of the bond? b) [4 points] A corporate bond with a face value of $10,000, a coupon rate of 10%, a yield to maturity of 5%, and a term to maturity of 3 years. How much would such a bond sell? c) [4 points] A student loan of $5,000 that requires one fixed payment every year for 5 years. The payment starts in two years. The yield to maturity is 6%. How much should be the annual payment? *Note: The first payment will be made in the second year after the initiation of the loan, and the last payment will be made in the 6th year.