1.) Suppose a ten-year, $1,000 bond with an 8.7% coupon rate and semiannual coupons is trading for $1,034.64.
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.3% APR, what will be the bond's price?
2.) Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7.5% (annual payments). The yield to maturity on this bond when it was issued was 6.1%. Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment?
Before the first coupon payment, the price of the bond is ______. (round to the nearest cent)