Question: part B us digebraically. Sketch the old and new equilibrium in a graph. 2. You own a $1,000 par zero-coupon bond that has 5 years

part B

us digebraically. Sketch the old and new equilibrium in a graph. 2. You own a $1,000 par zero-coupon bond that has 5 years of remaining maturity. You plan on selling the bond in one year and believe that the yield next year will have the following probability distribution: Probability Yield 0.2 2.70% 0.2 2.75% 0.3 3.20% 0.2 3.25% 0.1 3.50% a. What is your expected price when you sell the bond? b. What is the risk associated with the bond (standard deviation)

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