Problem 4. Bond Yields You have a treasury bond that pays $100 one year from today and $1,100 two years from today.

Problem 4. Bond Yields

You have a treasury bond that pays $100

 one year from today and $1,100

 two years from today.

You notice that the yield-to-maturity on a one year-zero coupon treasury bond is 1%

 and the yield-to-maturity on a two year-zero coupon treasury bond is 2%

. What should the price of your bond be?