1. Consider a 22-year bond with 8 percent annual coupon payments. The market rate (YTM) is 5.4 percent for this bond. The current yield of the bond is _______ percent. Answer it in percentage without the % sign, and round it to two decimal places.
2. Suppose that your required real rate of return is 4.2 percent and the inflation rate is 2.8 percent. You would expect to see a rate of ______ percent on a Treasury bill. Do not include the percent sign (%). Round your answer to 2 decimal places.