On 1/1/10, the following is observed for grade AAA (risk-free)bonds:- A bond maturing on 12/31/12 with coupon 6.0% and face value $1000 isselling at...

On 1/1/10, the following is observed for grade AAA (ìrisk-freeî)bonds:- A bond maturing on 12/31/12 with coupon 6.0% and face value $1000 isselling at $1112.80- A bond maturing on 12/31/12 with coupon 5.0% and face value $1000 isselling at $1084.00- A T-bill maturing on 12/31/10 is quoted with a yield to maturity of2.0408%.Assume that bond coupons are paid annually on 12/31.a) (3 point) Find the price as of 1/1/10 of $1 delivered in one year (p1).b) (3 points) Find the prices as of 1/1/10 of $1 delivered in two years andthree years (p2 and p3). (HINT: You may need to solve a system of equations)c) (3 point) Write down the cash áows of a three-year risk-free bond thathas face value of $1,000 and pays coupon C each year-end.d) (3 points) What is the coupon rate (coupon divided by face value) whichmust be paid for a newly-issued (on 1/1/10) three-year risk-free bond with facevalue of $1000 to sell at par? (ìsell at Parî means market value = face (orprincipal) value.) Use your prices from a) and b).e) (3 points) What is the coupon rate which must be paid for a newly-issued(on 1/1/10) two-year risk-free bond to sell at par?