Answer 16 and 17 using the table.

p. 11. Valuing Bonds L02] Union Local School District has a bond outstanding with a coupon rate of 2.9 percent paid semiannually and 16 years to maturity. The yield to maturity on this bond is 2.7 percent, and the bond has a par page 240 value of $5,000. What is the dollar price of the bond? 12. Calculating Real Rates of Return [LO4] If Treasury bills are currently paying 4.6 percent and the inflation rate is 1.9 percent, what is the approximate real rate of interest? The exact real rate? 13. Inflation and Nominal Returns (L04] Suppose the real rate is 1.8 percent and the inflation rate is 2.7 percent. What rate would you expect to see on a Treasury bill? 14. Nominal and Real Returns [LO4] An investment offers a total retum of 11.7 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 9 percent. What does Janice believe the inflation rate will be over the next year? 15. Nominal versus Real Returns [LO4] Say you own an asset that had a total return last year of 14.1 percent. If the inflation rate last year was 2.83 percent, what was your real return? 16. Using Treasury Quotes [LO2] Locate the Treasury issue in Figure 7.5 maturing in February 2029. What is its coupon rate? What is its bid price? What was the previous day's asked price? Assume a par value of $10,000. 17. Using Treasury Quotes (L02] Locate the Treasury bond in Figure 7.5 maturing in November 2026. Is this a premium or a discount bond? What is its current yield? What is its yield to maturity? What is the bid-ask spread in dollars? Assume a par value of $10,000. Coupon 8.750 2.500 Asked Yield 1.649 1.661 1.125 1.684 1.679 1.750 2.125 1.750 1.690 1.702 1.698 1.703 2.500 1.735 1.719 1.765 1.814 1.821 1.850 Maturity 5/15/2020 12/31/2020 9/30/2021 4/30/2022 12/31/2022 1/31/2023 3/31/2023 7/31/2023 4/30/2024 5/31/2024 1/31/2025 10/31/2025 11/15/2026 8/15/2027 2/15/2029 2/15/2031 2/15/2036 2/15/2037 5/15/2038 2/15/2039 5/15/2040 8/15/2041 8/15/2042 11/15/2042 2/15/2043 5/15/2043 8/15/2044 11/15/2045 2/15/2046 5/15/2047 8/15/2049 1.250 2.000 2.000 2.500 3.000 6.500 6.375 2.625 5.375 4.500 5.000 4.500 3.500 4.375 3.750 Treasury Notes and Bonds Bid Asked 103.180 103.184 100.294 100.300 98.304 98.310 100.050 100.054 101.096 101.102 100.042 100.046 102.194 102.000 98.114 98.120 101.036 101.042 101.066 101.072 103.202 103.206 106.212 106.216 130.200 130.210 132. 170 132.180 105.296 105.306 134.140 134.160 132.230 132.250 141.220 141.240 135.026 136.046 119.214 119.234 134.034 135.054 123.230 123.250 106.094 106.114 106.082 106.102 113.000 113.020 108.152 108.172 113.116 113.136 111.136 111.156 101.174 101.194 111.250 111.270 96.160 96.180 1.919 Chg -0.022 -0.006 0.102 0.008 0.002 0.006 0.002 0.004 -0.006 0.004 -0.004 -0.002 -0.030 -0.022 -0.008 -0.036 -0.770 -0.094 -0.074 -0.076 -0.078 -0.786 -0.080 -0.082 -0.760 -0.094 -0.078 -0.080 -0.080 -0.760 -0.074 1.947 2.108 2.131 2.182 2.233 2.280 2.348 2.386 2.391 2.750 2.750 3.125 2.875 3.125 3.000 2.500 3.000 2.250 2.390 2.398 2.402 2.403 2.417 2.409 2.413