1) A bond currently sells for $880, pays $80 per year (paid semiannually), and has a par value of $1,000. The bond has a term to maturity of 15 years. What is the yield to maturity?

2) A zero coupon bond has a par value of $1,000 and currently sells for $500. The term to maturity is 18 years. What is the yield to maturity (assuming semiannual compounding)?

3) A consol is selling for $930 and pays $50 annually in interest. What is this consols rate of return?

4) A bond has a yield to maturity of 8.00% and pays interest semiannually. What is this bonds effective annual rate?

5) An investor can purchase a two-year CD at a rate of 6 %. Alternatively, the investor can purchase two consecutive one-year CDs. The current rate on a one-year CD is 4.75%. According to the expectations theory, what is the expected one-year CD rate one year from now?

6) A six-month T-bill currently has a yield of 4.00%. A one-year T-note with a 4.50% coupon sells for 103. Use bootstrapping to find the spot rate six months from now. 7) What is the Macaulay duration of a 3 year 8% bond with a YTM of 10%?

7) What is the Macaulay duration of a 3 year 8% bond with a YTM of 10%?