What is the capital gain you will earn if you buy a bond that has 15 years to maturity, pays a coupon of 10% and has an opportunity cost of 12% if you sell the bond after one year?

Which of the following investments that pay will $18,500 in 8 years will have a higher price today? The security that earns an interest rate of 8.50%.   The security that earns an interest rate of 12.75%.

If you were to purchase a bond for $1,100 that paid $50 per year in dividends, what will be the current yield of your bond?

What price would you pay for a 10-year, AA bond with a Face Value of $1,000 and a coupon rate of 7.10%?

Suppose that you own a 1-year bond with a 10% coupon rate, a yield of 2%, and a face value of $1,000. Suppose further that you took out a 1-year loan of $900 at 2% (you lucky devil, you!) to help start your new food truck business. Calculate your net worth (assets minus liabilities) if all interest rates rise from 2% to 3%. ___________

You just bought a bond (M=$1000, CR=10%, n=20 years, semiannual coupon pay yielding 10.5%. If you sell the bond one year from today when the yield is 9.75%, what would be your realized (actual) rate of return (before-tax)? 16.996%

Please show work You want to purchase a bond that will pay you $300 per year for the next four years. If the annual interest rate is 4%, then what is the price of your bond if the market is in equilibrium? You buy a stock that is expected to pay a dividend of $300 per year for the next four years. If the discount rate is 5.5%, then what is the stock price in this case? Is this result the one you would expect when comparing this answer to the one you obtained in question 3? Why or why not?

4. You bought a 10-year, 5% coupon bond for $1,000 and sold it 1 year later for $1,100. What is the rate of return on your investment if the bond pays interest annually? If your marginal tax rate is 30%, and 50% of capital gains are taxable, what is the after-tax rate of return on your bond investment?

Calculate the range of potential annual returns if you invested 10% in bonds and 90% in stocks. How does this range compare with the range of annual returns if you invested 10% in stocks and 90% bonds?     What might you say to someone whose reason for investing in 90% bonds and 10% stocks is that they want a 6% return on investment?     Use evidence from this graph to explain the value of investing in both stocks and bonds - not just one or the other.

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