Question: . Solve both of the bond problems below. For your work, show what you would key into the buttons on your financial calculator. (a) Suppose

. Solve both of the bond problems below. For your work, show what you would key into the buttons on your financial calculator.

(a) Suppose that a 6.250% semi-annual coupon paying bond is priced at 107.623 per 100 of par value. The tenor of the bond is 10 years. What is the yield to maturity?

(b) Suppose that a 5.525% semi-annual coupon paying bond is priced at 97.223 per 100 of par value. The tenor of the bond is 12 years. What is the yield to maturity?

2. Solve both of the bond problems below. For your work, show what you would key into the buttons on your financial calculator.

(a) What is the price of a 4.000% semiannual coupon bond with yield to maturity of 3.875% and a tenor of 29 years.

(a) What is the price of a 4.000% semiannual coupon bond with yield to maturity of 3.875% and a tenor of 1 year.

(c) What is happening to the price of the bond as the tenor approaches zero (maturity)? What is this phenomenon called?

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