1) Debt issued by Southwest Airways currently yields 24%. A municipal bond of equal risk currently yields 16%. At what marginal tax rate would an investor be indifferent between these two bonds? 2) The one year interest rate over the next 10 years will be 3%, 4.5%, 6%, 7.5%, 9%, 10.5%, 13%, 14.5%, 16%, and 17.5%. Assume that investors prefer holding short-term bonds so that a liquidity premium of 10 basis points is required for each of a bond's maturity. What will be interest rate on a three-year bond, a six-year bond, and a nine-year bond? 3) The one-year interest rate over the next eight years will be 4%, 5.5%, 6%, 8.5%, 10%, 11.5%, 14%, and 15.5%. Using the expectations theory, what will be the interest rates on a four-year bond, a six-year bond, and an eight-year bond? 4) One-year T-bill rates are 2% currently. If interest rates are expected to go up after 3 years by 2% every vear, what ould be the