The yield to maturity on one-year zero-coupon bonds is presently 7%, and the yield to maturityon two-year zeros is eight%. The Treasury plans to situation a two-year maturity coupon bond, payingcoupons as soon as per 12 months with a coupon price of 9%. The face worth of the bond is $100.(a) At what worth will the bond promote?(b) What’s going to the yield to maturity on the bond be?(c) If the expectations concept of the yield curve is right, what’s the market expectation of theprice that the bond will promote for subsequent 12 months?(d) Recalculate your reply to (c) when you imagine within the liquidity choice concept, and that theliquidity premium is 1%.