1. Dizzy Corp. bonds bearing a coupon rate of 15%, pay coupons semiannually, have two years remaining to maturity and are currently priced at $980 per bond. What is the yield to maturity?

2. J&J Manufacturing just issued a bond with a $1,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays annual coupons, and the yield to maturity is 6.8%, what will the bond sell for?

3. King Noodles bonds have a 7.5% coupon rate. Interest is paid quarterly and the bonds have a maturity of 8 years. If the appropriate discount rate is 8% on similar bonds, what is the price of King Noodles bonds?

4. If investors require a 7% nominal return and the expected inflation rate is 3%, what is the expected real return?

5. You presently own stock that you purchased one year ago. Your return on the stock for the past year was 20%. You calculate your real return on investment was 12.63%. What must have been the rate of inflation?

Problems 1. Dizzy Corp. bonds bearing a coupon rate of 15%, pay coupons semiannually, have two years remaining to maturity and are currently priced at $980 per bond. What is the yield to maturity? 2. J\&J Manufacturing just issued a bond with a $1,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays annual coupons, and the yield to maturity is 6.8%, what will the bond sell for? 3. King Noodles' bonds have a 7.5% coupon rate. Interest is paid quarterly and the bonds have a maturity of 8 years. If the appropriate discount rate is 8% on similar bonds, what is the price of King Noodles' bonds? 4. If investors require a 7% nominal return and the expected inflation rate is 3%, what is the expected real return? 5. You presently own stock that you purchased one year ago. Your return on the stock for the past year was 20%. You calculate your real return on investment was 12.63%. What must have been the rate of inflation