Problem 1 Bond A 4 Years Coupon 0.06 par 100 YTM 0.05 Annual Compounding. a. What is the price of this bond? b. . What is the price of this bond if you sell it after two years? Assume rates stay at 5%. C. Assume rates go up to 8% immediately after you purchase this bond(before the first coupon payment) If you sell sell the bond at the end of year two what is the future value of the reinvested coupon payments at that time? d. . What is the value of the bond at the end of two years? (rates go to 8%) e. What is you horizon return at the end of two years? (rates go to 8%) f. Calculate the amount of your capital gain or loss. State whether it is a gain or loss