1. A firm has a bond issue with face value of $1,000, a 7% coupon rate, and nine years to maturity. The bond makes coupon payments every six months and is currently priced at $1,067.89. What is the yield to maturity on this bond?

Select one:

a. 5.67%

b. 6.01%

c. 7.07%

d. 7.49%

e. 14.99%

2. What is the duration of a five-year bond with a coupon rate of 7%, a yield to maturity of 8%, a semi-annual coupon payment, and a face value of $1,000?

Select one:

a. 3.80 years

b. 4.20 years

c. 4.25 years

d. 4.29 years

e. 8.51 years

3. The yield on a 10-year bond is 7%. The 30-day T-bill yield is 2.5%, while the inflation rate is estimated to be 2.3%. What is the real rate of return on the bond based on the exact Fisher Effect formula?

Select one:

a. 3.00%

b. 3.90%

c. 4.00%

d. 4.59%

e. 9.16%