Chapter 8 Problems 2 4 9 19 242. Assume that a bond will make payments every six

Chapter 8 Problems 2 4 9 19 242. Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): 0 1 2 3 20 $20 $20 $20 $20 + $1000a. What is the maturity of the bond (in years)?b. What is the coupon rate (in percent)?c. What is the face value?4. Suppose the current zero-coupon yield curve for risk-free bonds is as follows:Maturity (years) 1 2 3 4 5YTM 5.00% 5.50% 5.75% 5.95% 6.05%a. What is the price per $100 face value of a two-year zero-coupon risk-free bond?b. What is the price per $100 face value of a four-year zero-coupon risk-free bond?c. What is the risk-free interest rate for a five-year maturity?9. Suppose a seven-year $1000 bond with an 8% coupon rate and semiannual coupon is trading with a yield to maturity of 6.75%.a. Is this bond currently trading at a discount at par or at a premium? Explain.b. If the yield to maturity of the bond rise to 7.00% (APR with semiannual compounding) what price will the bond trade for?19. Consider a five-year default-free bond with annual coupons of 5% and a face value of $1000.a. Without doing any calculations determine whether this bond is trading at a premium or at a discount. Explain?b. What is the yield to maturity on this bond?c. If the yield to maturity on this bond increased to 5.2% what would the new price be?24. The following table summarizes the yields to maturity on several one-year zero-coupon securities:Security Yield (%)Treasury 3.1 AAA corporate 3.2 BBB corporate 4.2 B corporate 4.9a. What is the price (expressed as a percentage of the face value) of a one-year zero-coupon corporate bond with a AAA rating?b. What is the credit spread on AAA-rated corporate bonds?c. What is the credit spread on B-rated corporate bonds?c. How does the credit spread change with the bond rating? Why?