1. A bond has a $1,000 Face Value, a 7% interest rate, a maturity date of 15 years and currently selling for $945. You have a required rate of return of 8%. If you purchase the bond it would give you an expected return of

a. 7.63%

b. $945

c. 7%

d. $914

e. None of the above

2. A bond with a $1,000 Face Value, an 8% nominal interest rate, a maturity date of 15 years and a YTM (market rate) of 8.5% would currently be selling for:

a. $1,000

b. $958

c. $1,042

d. $1,161

e. None of the above