1. Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 5.50%, based on semiannual compounding. What is the bond’s price?
A. $1,177.18
B. $1,024.15
C. $1,447.93
D. $1,106.55
E. $1,000.60
2. What's the rate of return you would earn if you paid $1,680 for a perpetuity that pays $85 per year?
A. 4.60%
B. 4.20%
C. 4.50%
D. 6.27%
E. 5.06%