Question: Please use the examples we worked on in class to work on the following two problems (show and TYPE your work when you submit on

Please use the examples we worked on in class to work on the following two problems (show and TYPE your work when you submit on Canvas Problem 1: The real rate of interest is currently 2%; the inflation expectation and risk premiums for a security are shown below. Inflation expectation premium Risk premium 5% 4% Find the risk-free rate of interest, RF, that is applicable to the security. Find the nominal rate of interest for the security b. a Problem: Complex Steinshas an outstanding lue of 51.000 par value bonds with a 12% cupon interest rate. The issue pays Interest annually and tot 11 years remaining to its maturity date. It bonds of similar rikare currently earning a rate of return of Xhow much should the Complex Stew bond sell for today Do two powinieravons why the rate on site mak bionda is below the componenterest rate on the Complex Systems bond to nebo vou were 249 tion Required Returns and bond Values

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