a. What is the present value of the bond? b-1. If the yield to maturity changes to 1%, what will be the present value? b-2. If the yield to maturity changes to 8%, what will be the present value? b-3. If the yield to maturity changes to 15%, what will be the present value? Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.

Q: b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year.…

A: MaturityPrice of Bond1 $        910.902 $        907.973 $        828.124 $        768.49

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.