1. Northrop Real Estate Company management is planning to fund a development project by issuing 10-year zero coupon bonds with a face value of $1,000. Assuming semiannual compounding, what will be the price of these bonds if the appropriate discount rate is 11.34 percent?
2. Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 5.325 percent. If these bonds have a market price of $981.98, what yield to maturity and effective annual yield can she expect to earn?