Show all work. Label and clearly explain your answer. This is very important.

1) See Attached picture

a) Draw a diagram showing the cash flows for each of the bonds.

b) Calculate the price of the Vermeero bond.

c) Calculate the yield to maturity for the Renwaro bond.

d) Suppose you purchase the Renwaro bond today. You plan to sell this bond one year from now, and you forecast that the yield to maturity of the Renwaro (at the sale date) will be 5% annual rate, compounded semiannually. If your forecast is correct, what will the holding period yield for this investment be?

2) The PLAY Index is a price weighted stock index based on the 5 largest toy and game manufacturers in the nation. See attached chart that shows the prices and shares outstanding for each of the five companies at year-end for 2016 and 2017. The initial divisor for the index is 100.

a) Calculate the rate of return on the PLAY index over 2017.

b) At the end of 2017, Linkna Logs was dropped from the index, and was replaced by Loggle Corporation. Loggle's share price was $166at the time. Calculate the new divisor for the index.

c) Suppose the PLAY index was a value-weighted index instead of a price-weighted index. If so, what would be the rate of return over 2017?