1. If Peter borrows $100 from his sister and three years later she wants $130 back from him, what is the return (yield-to-maturity, interest rate) on this loan? 2. You won a lottery with grand prize of $10 million, payable over 20 years at $500,000 per year. If the first payment is made immediately. If your friend Jenny is willing to buy it from you at $6,079,058.25 today. What is the return she is looking for? 3. Calculate the present value of a $1,000 zero-coupon bond with 5 years to maturity if the required annual interest rate is 6%. 4. You purchased a zero coupon bond at 585 , it has 10yrs to maturity. What is the rate of return on this pure discount bond? 5. Consider a bond with a 7% annual coupon and a face value of $1,000. Complete the following table: What relationship do you observe between yield to maturity (your discount rate) and the current market value? (Please show your calculations for at least one bond price in the table. Yield to maturity is the discount rate in the table. ) Consider a coupon bond that has a $1,000 par value and a coupon rate of 10%. The bond is currently selling for $1,150 and has 8 years to maturity. Use trials and errors method to find the bond's yield to maturity? (Use excel spread sheet to solve it. Videos assigned this week will help.) Please attach your Excel file to the assignment