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# 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?