(Answered) The city of ames issued a new series of bonds on jan 1 2009

Engineering

The City of Ames issued a new series of bonds on Jan 1, 2009. The bonds were sold at par ($1,000), have a 2.0% annual coupon rate and mature in 10 years, on Jan 1, 2019. Coupon interest payments are made semi-annually (on June 30 and December 31).

(a) On January 1, 2012, you purchased the bond for $888. What was the Semi-Annual Current Yield of this bond?

(b) Assuming that the market interest rates had risen to 4.5%, what should be the fair price of the bond on January 1, 2011 (16 coupon payments left)?

(c) On July 1, 2012, you purchased the bond for $1,100. What was the semi-annual Yield to Maturity (13 coupon payments left)?

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