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2, (15 points) Consider a coupon bond with coupon payment-4.25, M-100, and n-2. Suppose y,...

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2, (15 points) Consider a coupon bond with coupon payment-4.25, M-100, and n-2. Suppose y, = 4% and = 4.24%. Consider a forward contract for the delivery of the coupon bond in one period from today. Calculate the forward price using the following three approaches: 1) use the forward rate to price the forward contract; 2) use the method of buying and selling bonds to mimic the cash flow and price the forward contract; 3) use the cost of carry approach: spot-forward parity adjusted for the coupons. 2, (15 points) Consider a coupon bond with coupon payment-4.25, M-100, and n-2. Suppose y, = 4% and = 4.24%. Consider a forward contract for the delivery of the coupon bond in one period from today. Calculate the forward price using the following three approaches: 1) use the forward rate to price the forward contract; 2) use the method of buying and selling bonds to mimic the cash flow and price the forward contract; 3) use the cost of carry approach: spot-forward parity adjusted for the coupons

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