Question: Question 4 1) A 100 bond with two years to maturity and an annual coupon of 9% is available (the next coupon is payable in

Question 4 1) A 100 bond with two years to maturity

Question 4 1) A 100 bond with two years to maturity and an annual coupon of 9% is available (the next coupon is payable in one year). a) If the yield to maturity is 9%, what will be the bond price? b) If the market price is 98, what yield to maturity does it offer? 2) Please explain the liquidity preference hypothesis of the term structure of interest rates

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