1. Suppose the current one-year interest rate is 2.5% and the two-year interest rate is 3.5%. Calculate the expected one-year interest rate one year from now. (Enter percentages as decimals and round to 4 decimals;
2. Suppose you are given the following bond quote information: Term: 7-years Price: $1,125.50 Coupon Rate: 8% Par value: $1,000 Assume the bond makes semi-annual payments, calculate the yield-to-maturity for the bond. (Enter percentages as decimals and round to 4 decimals)
3. Amy Monroe wants to create a fund today that will enable her to withdraw $26,200 per year for 7 years, with the first withdrawal to take place 5 years from today.
If the fund earns 8% interest, how much must Amy invest today?
Investment amount$_____________