1. You are thinking about buying a bond that offers an annual coupon rate of 6%, with exactly 8 years remaining to maturity. The face value of the bond is $1,000. Your required return is 5% per year. How much should you be willing to pay for this bond?
2. Assume the spot rate of a currency is $.37 and the 90-day forward rate is $.36. The forward rate of this currency exhibits a ____ of ____ on an annualized basis.