1. Assuming annual interest payments and a principal value of $100, what is the value of a 5-year 6.2% coupon bond when the discount rate is i) 4.5%, ii) 6.2%, and iii) 7.3%? Show that your results are consistent with the relationship between the coupon rate, discount rate, and price relative to par value.

2. Find the present value of $500 to be paid at the end of 28 months

a) if the nominal interest rate is 6% convertible monthly

b) if the nominal discount rate is 6% compounded every 4 months

c) if the nominal interest rate is 4% compounded semiannually

d) if the nominal discount rate is 5% payable annually