Question 1:

A 2-year bond with par value $1,000 making annual coupon payments of $100 is priced at $1,000.

1. What is the yield to maturity of the bond?
2. What will be the price of the bond if interest rate turns out to be (i) 8% and (ii) 12%?
3. What will be holding period return (loss) over the bond in case of interest rate changes?

Question 2:

A 5-year bond with par value $1,000 making annual coupon payments at the rate of 8% and priced at $ 980

1. What is the coupon payment on the bond?
2. What is the yield to maturity of the bond?

C. What will be the current yield at 8% interest rate and 12% interest rate?

4. What will be the price of the bond if interest rate turns out to be (i) 5% and (ii) 10%?
5. What will be holding period return (loss) over the bond in case of interest rate changes?