For a zero coupon bond,
a)
Value = 1000/1.1449
Value = $873.4
b)
(1 + r)8 = 1.25
1 + r = 1.0283
r = 2.8%
c)
YTM = 3%
YTM = 6%
% Change = (P2 - P1)/P1 = (792.09 - 888.49)/888.49 = -10.8%
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