1. Karvonen Inc. has bonds outstanding with a par value of $1,000, and a current market value of $1,190. The annual coupon rate on these bonds is 7% (semi-annual coupons) and they mature in 4.5 years. Carmel purchased a Karvonen bond exactly 3 years ago for $950. If Carmel sells the bond today, what is her annual holding period return?

2. Today, on Nov 15, 2023, you decide to diversify your retirement portfolio and talk to your financial advisor about investing in bonds. She recommends two different bonds (Bond A and Bond B), both of which have a $1,000 face value and pay semi-annual coupons. Bond A has a 4.5% coupon rate and matures on Nov 15, 2035. Bond B has a 3.5% coupon and matures on Nov 15, 2026. Your advisor mentions that the yield to maturity Bond A is 4.20% and Bond B traded at their in-house bond desk for a quoted price of 97.20. a) What is the price of Bond A? b) What is the current yield of Bond A? c) What is the current yield for Bond B? d) What is the yield to maturity on Bond B?

3.Secure Co. has preferred shares with a par value of $75, a dividend rate of 6 percent and trade at a price of $58. HRC Incs preferred shares have a par value of $60, pay a dividend of $2.90 and trade at a market price of $43. Which companys preferred shares have a higher required return? Show your work.