Question: a) Exxon issues 20-year bonds with a face value of $1,000 at an annual coupon rate of 5% paid semi-annually. What will be the price

a) Exxon issues 20-year bonds with a face value of $1,000 at an annual coupon rate of 5% paid semi-annually. What will be the price of bonds next year if the yield decreases to 3%? Answer: $1,288.05

b) You need to have $2,000,000 when you retire in 40 years. You can earn 7% per year in your investments. How much do you need to save each year to achieve your goal? Answer: $10,018

c) Google issued 10-year semi-annual bonds with an annual rate of 4.5% and face value of $1,000. They are convertible at any time into 4 shares of common stock. What is the market price of the bonds if the yield to maturity is 3.0% and the common shares are trading at $275 per share? Answer: $1,128.76

Please include formulas and do not use excel

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