1) Last year, Joan bought a $1,000 face value corporate bond with the 10% annual coupon rate and a twenty-year maturity. At the time of purchase, it had the expected yield to maturity of= 9.02%. If Joan sold bond today for= $1,159.47, what rate of return would she have earned for past year?
2) Current and future values for various interest rates. Determine the following values. Compounding/discounting occurs annually.
a) The present value of $500 due in 10 year at a discount rate of 3%.
b) The present value of $2,370 due in 10 years at 6%.
c) The present value of $2,370 due in 10 years at 3%.