If the interest rate is 5%, what is the present value of a security that pays you $1,050 next year, and $1,102.50 two years from now? If this security sold for $2,200, is the yield to maturity (YTM) greater or less than 5%?

if the interest rate is 5%,what is the present value of a security that pays you $1,050 next year and $1,102.50 two years from now? if this security sold for $2,200 is the yield to maturity greater or less than 5%? why?

1.Security’s market price is $500, risk-free rate is 5%. Thesecurity makes one risk-free payment in one year and matures. Whatmust be risk-free payoff if the security in one year to make youinterested in investing in this security?

2.Risk-free investment pays $550 in two years, risk-freeinterest rate is 5%. What is the highest amount you would agree topay for this security

A $1000 face-value coupon bond has a 10% coupon rate, a maturity of 4 years, and a price of $960.

Is the yield to maturity going to be above or below 10%, and why? (2.5 marks)

Calculate the present value of the bond when interest rate is 12%. Must the yield to maturity be above or below 12%, and why? (2.5 marks)

Calculate the present value of the bond when interest rate is 8%. Must the yield to maturity be above or below 8%, and why? (2.5 marks)

Calculate the yield to maturity for this bond at the current price. (2.5 marks)