1. Interpreting Bond Yields Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10% coupon bond sells at par. Two years from now, the required return on the same bond is 8%. What is the coupon rate on the bond then? The YTM?

3. Bond Prices Malahat Inc. has 7.5% coupon bonds on the market that have ten years left to maturity. The bonds make annual payments. If the YTM on these bonds is 8.75%, what is the current bond price?

5. Coupon rates Goldstream Enterprises has bonds on the market making annual payments, with nine years to maturity and selling for $948. At this price, the bonds yield 5.9%. What must the coupon rate be on the bonds?

7. Bond yields Braemar Corp issued 30-year bonds two years ago at a coupon rate of 7.1%. The bonds make semiannual payments. If these bonds currently sell for 105% of par value, what is the YTM?

9. Calculating Real Rates of Return If treasury bills are currently paying 6% and the inflation rate is 2.6%, what is the approximate real rate of interest? The exact real rate?

11. Nominal and Real Returns An investment offers a 14% total return over the coming year. Bill Morneau thinks the total real return on this investment will be only 9%. What does Morneau believe the inflation rate will be over the next year?

13. Bond pricing Consider a bond that has just paid a semi-annual coupon and has exactly 2.5 years to maturity and an annual coupon rate of 3.5%. Price the bond with a yield 4.2%. This is an annuity calculation and the stated yield and stated coupon are double the semi0annual yield and coupon.

15. Interest on zeroes Tillicum Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 25-year zero-coupon bonds to raise the money. The required return on the bonds will be 7%. What will these bonds sell for at issuance?