The yield of the 10-year US Treasury bond is 1.20%. It is the risk-free rate. You work  for investment manager and your boss asks you to calculate the price of a 10-year  corporate bond that yields 3.00% more than its risk-free rate and has a face value of $1,000. The fixed coupon of this corporate bond is 5.00%. Both bonds pay coupons  annually.  • What is the current price of the corporate bond?  • Calculate the price of the bond if its yield increased by 1.00%. • Calculate the price of the bond if its yield decreased by 1.00%. Please explain the process and show the calculations/formulas.

The yield curve currently observed in the market is as follows: y1 = 7%, Y2 = 8%, and yz = 9%. You are trying to decide between buying a two-year bond (Bond A) and three-year bond (Bond B), each of which is default-risk free and pays annual coupons of 8% per year. You strongly believe that yield curve in one year will become flat at 9%. Which one of the two bonds should you buy today if you plan to sell this bond in exactly one year (right after you receive the first coupon payment)? Assume interest is compounded annually, and each bond has a face value of $1,000. Bond B O Neither bond -- The expected total return of both bonds will be negative if interest rates increase to 9% in one year Bond A Both bonds provide the same return over a one year investment horizon A portfolio that invests 50% of your wealth in each bond provides the highest total expected return

Consider a 2-year U.S. treasury bond that pays a coupon of 10 in one year from now and a coupon and principal of 110 in two years from now. If the expected yield-to-maturity of the bond increases from 10% to 15%, then the price of the bond changes from _________.   100 to 91.87   109.09 to 104.34   90.09 to 83.18   The interest rate of a bond is fixed and so the price never changes.

Assume that you are considering the purchase of a 5-year, noncallable bond with an annual coupon rate of 8.00%. The bond has a face value of $1000, and it makes semiannual interest payments. If you require an 11.55% yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.