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(1) Assume that you are interested in purchasing a bond that has a required rate of return of 5% and a coupon rate of 12%. What price should you pay for this bond if it has 20 years remaining until maturity?

(2) Assume that you are interested in purchasing a bond that has a required rate of return of 10% and a coupon rate of 12%. What price should you pay for this bond if it has 20 years remaining until maturity?

(3) Assume that you are interested in purchasing a bond that has a required rate of return of 15% and a coupon rate of 12%. What price should you pay for this bond if it has 20 years remaining until maturity?

(4) Discuss your results in numbers 1 to 3 above.

(5 -10) Complete the following table and discuss your findings.

Bond	Coupon	Required Return	Time to Maturity	Price
5	10%	6%	5
6	10%	6%	10
7	10%	6%	15
8	10%	14%	5
9	10%	14%	10
10	10%	14%	15

(11 - 13) Determine the current yield on the following bonds.

Bond	Coupon	Required Return	Time to Maturity	Price	Current Yield
11	10%	8%	5
12	10%	10%	10
13	10%	12%	15

(14 - 16) Determine the yield to maturity on the following securities.

Bond	Coupon	Time to Maturity	Time to Call	Market Price	Call Price	YTM
14	8%	12	5	$ 1,075.00	$1,080
15	10%	15	4	$ 975.00	$1,100
16	12%	20	5	$ 1,325.00	$1,200

(17- 19) Determine the yield to call on the following securities.

Bond	Coupon	Time to Maturity	Time to Call	Market Price	Call Price	YTC
17	8%	12	5	$ 1,075.00	$1,080
18	10%	15	4	$ 975.00	$1,100
19	12%	20	5	$ 1,325.00	$1,200

(20 - 22) Determine the realized yield (ARY) on the following investments.

Bond	Purchase Price	Sales Price	Coupon Rate	Holding Period	YTC
20	$ 1,075.00	$ 1,285.00	8%	3
21	$ 975.00	$ 1,155.00	10%	5
22	$ 1,325.00	$ 985.00	12%	8

(23 - 25) Assume that the expectations of one year interest rates are as follows:

Year 1 6%

Year 2 5%

Year 3 8%

Year 4 5%

Based upon the Expectations Theory, determine the:

(23) Interest rate on a security with a 2 year maturity

(24) Interest rate on a security with a 3 year maturity

(25) Interest rate on a security with a 4 year maturity