1. A bond has a face value of 10000 and a coupon rate of 6% with an original maturity of 10 years with six years to maturity left. If yields on bonds of similar risk are expected to be 6.6% in two years what will the value of the bond be then?
A 9652.22
B 9675.25
C 9671.25
D 9828.71
2. This morning, you purchased a stock that will pay an annual dividend of $1.90 per share next year. You require a 11.73 percent rate of return and the annual dividend increases at 3.5 percent annually. What will your capital gain be on this stock if you sell it three years from now?
$2.92
$2.87
$2.51
$2.43
$2.63