1. An investor purchased a corporate bond for S990. The bond matures in exactly one year, has a par value at maturity of $1,000, and offers a fixed coupon rate of interest of 6% per year on the par value. (a) Identify the dollar amount of taxable income earned. b) Calculate the investor's holding period rate of return. Compute two decimal places (c) Would a Treasury bond maturing in exactly one year provide a rate of return equal to, lower than, or higher than the value calculated in part (b)? 2. Consider the following information about financial markets: expected rate of inflation, 3%; default risk premium, 1%; seniority risk premium, 5%; real risk-free rate of interest (liquidity risk, 296; maturity risk premium, 4%. (a) Estimate the rate of return on a Treasury bill. (b) Estimate the rate of return on a Treasury bond. (c) Estimate the rate of return on a corporate bond. o Estimate the rate of returm on common stock