1. At an interest rate of 6%, what is the present value of $10,000 received 20 years from now? 2. A consol makes a coupon payment of $80 per year and sells for $1,200. What is its yield to maturity? 3. What is the rate of return on a 20-year bond that was purchased at the end of 2018 for a face value of $1000 and was sold one year later for $800, if its coupon rate is 4%? 4. What is wrong (if anything) with each of the following statements? Show work where it is appropriate. a. "The current yield is the most economically meaningful measure of interest rates." b. At an interest rate of 10%, the present value of $1000 received 10 years from today is greater than the present value of $600 received 3 years from now." c. "Bond prices rose today, driving up interest rates by 50 basis points." d. To calculate the monthly payment on a fixed payment loan, divide the annual interest rate by 10 and expand the total number of payments by ten times the number of years of the loan." e. "A coupon payment of $120 on a $5,000 face value bond implies a coupon rate of .024%" f. "A $1000 face value bond that is selling for $1200 has a yield to maturity that is greater than the bond's coupon rate." g. "This bond is getting ready to mature in two years, so its current yield will do a nice job of approximating its yield to maturity." h. "I am going to invest in 30-year US Treasury Bonds since they are riskless." i. "Real interest rates cannot be negative." j. Everything else equal, the higher the rate of expected inflation, the lower will be the nominal interest rate."||