1. A 15-year bond with a nominal value of $1,000 has a 7% annual coupon. The bond is currently selling for $925. If the yield to maturity stays at its current rate, what will the price be 4 years from now?

2. Mear Corporation has 5-year, $1,000 face value bonds with a yield-to-maturity yield of 7.5% and a 10% annual coupon rate. What are the current and capital gains yields on bonds for this year?

3. The 10-year, 10% six-month coupon bond has a face value of $1,000. The price of the bond is $1,150. What is the nominal yield to maturity of the bond?

4. Suppose the actual risk-free rate is 3.50%, the average future inflation rate is 2.25%, a maturity premium of 0.08% is applied for each year to maturity, so MRP = 0.08%*t, where t is the number of years to maturity. Also, assume that a liquidity premium of 0.5% and a default risk premium of 0.85% are applied to corporate bonds rated A. How much higher would the yield on a 10-year Grade A corporate bond be than on a 5-year Treasury bond?

5. Heyday Technologies issued 102-year bonds with a face value of $1,000 yesterday. These bonds pay interest of $60 every six months and their prices have remained at the issuance price of $1,000. Skylab's CFO determined that the firm needed an additional $2,000,000 and decided to issue a 10-year, $1,000 face value bond that pays only $50 interest every six months. How many new bonds must Skylab issue to raise $2,000,000 if both bonds will yield the same returns to investors?

(Do this in Excel)