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1. What is the market value of the following bond?

Coupon 8%

Maturity date 2038

Interest paid semiannually

Par Value $1000

Market interest rate 10%

2. What is the market value of the following bond?

Coupon 9%

Maturity date 2028

Interest paid semiannually

Par Value $1000

Market interest rate 8%

3. What is the yield to maturity of the following bond?

Coupon 9%

Maturity date 2027

Interest paid semiannually

Par Value $1000

Market price $955.00

4. What is the current yield of bond in Question 3?

5. The risk free rate is 7%, the return in the market is 10%, and the beta is 1.30. What return must you receive to be satisfied that you are being fairly compensated for the risk of the firm?

6. What should a zero coupon bond maturing for $1000 in 9 years with a 7% market rate sell for?