Question

1.Jackson Corporation's bonds have 14 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 7%. The bonds have a yield to maturity of 8%. What is the current market price of these bonds? Do not round intermediate calculations. Round your answer to the nearest cent.

2.Wilson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a price of $850. What is their yield to maturity? Round your answer to two decimal places.

3.The real risk-free rate is 3%, and inflation is expected to be 4% for the next 2 years. A 2-year Treasury security yields 7.3%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

Answer 1

1)