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Question:1. In February 2015 Treasury 4 3/8s of 2040 offered a semiannually compounded yield to maturity of 2.88%. Recognizing that coupons are paid semiannually, calculate the bond's price. Assume face value is $1,000. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Bond price? ________

2. A 21-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.75% (2.875% of face value every six months). The reported yield to maturity is 5.4% (a six-month discount rate of 5.4/2 = 2.7%). (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a. What is the present value of the bond?

Present value           $ 

b. If the yield to maturity changes to 1%, what will be the present value?

Present value           $ 

c. If the yield to maturity changes to 8%, what will be the present value?

Present value           $ 

d. If the yield to maturity changes to 15%, what will be the present value?  

Present value           $

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