1. From 2002 to 2009, the earnings per share of a common stock of a company increased from $4.71 to $9.38. What is the compounded annual rate of increase? What is the daily period rate at a standard conversion rate of 1 year = 360 days? Compare the two answers: why does it make sense that the second number is smaller than the first?
2. Last year, a company issued a 10-year annual coupon bond at par value with a yield to maturity of 10.20%. The current yield to maturity has increased to 10.50%. Investors anticipate another increase in yield to maturity over the next 12 months to 10.80%. If the investors forecast accurately, what will be the rate of return on an investment in this bond over the next year? (Do not round intermediate calculations. Enter your final answer as a percent rounded to 2 decimal places.)