You have just purchased a newly issued municipal bond for $1,000. The bond pays $50 to its holder at the end of the the first, s
econd, and third years and pays $1,050 upon its maturity at the end of the following year. a. What are the principal amount, the term, the coupon rate, and the coupon payment for your bond? Instructions: Enter your responses as whole numbers. Principal amount: $ Term: years Coupon rate: % Coupon payment: $ b. If you decide to sell your bond at the end of 3 years (after receiving the third $50 payment), what price can you expect for your bond if the one-year interest rate at that time is 2 percent? 4 percent? 6 percent? Instructions: Enter your responses as whole numbers. Expected price for the bond at: 2 percent: $ 4 percent: $ 6 percent: $
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