An analyst is evaluating securities in a developing nation where the inflation rate is very high. As a result, the analyst has been warned not to ignore the cross-product between the real rate and inflation. If the real risk-free rate is 4% and inflation is expected to be 17% each of the next 4 years, what is the yield on a 4-year security with no maturity, default, or liquidity risk? (Hint: Refer to "The Links Between Expected Inflation and Interest Rates: A Closer Look".) Round your answer to two decimal places.

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2. Madsen Motors's bonds have 17 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 12%, and the yield to maturity is 13%. What is the bond's current market price? Round your answer to the nearest cent. ......

3. Nesmith Corporation's outstanding bonds have a $1,000 par value, a 12% semiannual coupon, 12 years to maturity, and a 16% YTM. What is the bond's price? Round your answer to the nearest cent.