$1.$ Java Spirit Ltd$.$ is seeking financing for a new initiative it is contemplating. It intends to issue a new series of bonds on January $1,2022,$ with a $$1,000$ par value. They are expected to mature in $25$ years and will have a coupon rate of $7\%,$ paid semi$-$annually.

a$)$ What is the expected maturity date of the bonds?

b$)$ What is the expected price of the bond on December $31,2029,$ if interest rates were $10\%?$ How would the bonds be classified?

c$)$ What is the expected price of the bonds on January $1,2038,$ if interest rates were $7\%?$ How would these bonds be classified?

d$)$ What is the bond$$s expected price on June $30,2042,$ if interest rates had fallen to $5\%?$ How would these bonds be classified?

e$)$ What lessons can we learn from parts $($b$)$ to $($d$)$ above?

f$)$ What is the bond$$s yield to maturity $($YTM$)$ on July $1,2044,$ if the bond sold for $$988$on that date?

$2.$ SAH, Inc. is about to issue an $8\%$ coupon rate bond that is to mature in twelve years. The

bond had a $$1,000$ par value, and interest is due to be paid semi$-$annually. The bonds will be

issued on November $1,2021.$

a$.$ What is the maturity date of the bonds?

b$.$ What are the interest payment dates for these bonds?

c$.$ If your required rate of return $($yield to maturity$)$ is $12\%,$ what price would you be willing to pay for the bonds on November $1,2021?$