Suppose the U.S.government issues a two-year Treasury note with a face value of $4,000 and an 8-percent coupon.
(A)If the current interest rate is 10 percent,what will be the market price of the note?
(B)Suppose you expect the interest rate to remain at 10 percent this year but rise to 12 percent next year.How much would you pay for the note today? Why?

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The Answer of Suppose the U.S.government issues a two-year Treasury note with a face value of $4,000 and an 8-percent coupon.
(A)If the current interest rate is 10 percent,what will be the market price of the note?
(B)Suppose you expect the interest rate to remain at 10 percent this year but rise to 12 percent next year.How much would you pay for the note today? Why?