Vijay Prices of zero-coupon bonds reveal the following pattern of forward rates:Forward Rate5%68In addition to the zero-coupon bond, investors also may purchase a 3-year bond making annual payments of$55 with par value $1,000.Year1a. What is the price of the coupon bond? (Do not round intermediate calculations. Round your answer to 2decimal places.)4723b. What is the yield to maturity of the coupon bond? (Do not round intermediate calculations. Round youranswer to 2 decimal places.)a.c. Under the expectations hypothesis, what is the expected realized compound yield of the coupon bond? (Donot round intermediate calculations. Round your answer to 2 decimal places.)d. If you forecast that the yield curve in 1 year will be flat at 7.0%, what is your forecast for the expected rate ofreturn on the coupon bond for the 1-year holding period? (Do not round intermediate calculations. Round youranswer to 2 decimal places.)b.C.d.Answer is complete but not entirely correct.PriceYield to maturityRealized compound yieldHolding period return$979.476.27%6.33%6.78 X %

Zero coupon bonds refer to bonds which are trading at a zero interest rate as no amount of interest…

Prices of zero-coupon bonds reveal the following pattern of forward rates: Forward Rate 5% 6 8 Year 1 2 3 In addition to the zero-coupon bond, investors also may purchase a 3-year bond making annual payments of $55 with par value $1,000. a. What is the price of the coupon bond? (Do not round intermediate calculations. Round your answer to 2