Intro

You bought a $10-$year zero$-$coupon bond with a face value of $$1,000$ and a yield to

maturity of $2\mathrm{.}6\%.($EAR$).$ You keep the bond for $5$ years before selling it$.$

Part $1$

Attempt $\frac{1}{3}$ for $10$ pts$.$

What was the price of the bond when you bought it$?$

Correct

Part $2$

What is the rate of return $($HPR$)$ if the yield to maturity is still $2\mathrm{.}6\%$ when you sell

the bond?

Part $3$

What is the rate of return $($HPR$)$ if the yield to maturity is $4\mathrm{.}6\%$ when you sell the

bond?

Part $4$

What is the rate of return $($HPR$)$ if the yield to maturity is $1\mathrm{.}1\%$ when you sell the

bond?