1. If you purchase a zero coupon bond today for $235 and it matures at $1,000 in 12 years, what rate of return will you earn on that bond? Round PVIF value in intermediate calculations to three decimal places. Use Table II to answer the question. Round your answer to one decimal place.
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2. BCC has issued 9 ^5/8 percent debentures that will mature on July 15, Year 28. Assume that interest is paid and compounded annually. If an investor purchased a $1,000 denomination bond for $1,045 on July 15, Year 1, determine the bond’s yield-to-maturity. Round your answer to two decimal places.
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