1. Frieda Wannamaker is a taxable investor who is currently in the 28% income-tax bracket. She is considering purchasing a tax-exempt bond with a yield of 3.75%. What is the taxable equivalent yield on this bond?

2. A bond with 14 years to maturity and a coupon rate of 6.375% has a yield-to-maturity of 4.5%. Assuming the bond's YTM remains constant, the bond's face value will do what? Please explain why?

3. An investor buys a(n) 7% bond for $897 and sells it on one year for $942. What is the investor's holding period return?