(1 point) A savings account pays interest at a rate of 3%, quarterly compounded.What is the effective annual rate of interest (EAR)?

(2 points) A Microsoft bond has 12 years to maturity.Every six months, the bond makes a coupon payment of $21.The bond has a par value of $1000, a yield to maturity of 4.7 percent. What is the price of this bond?

Kellogg has bonds outstanding which were issued in November 2009 and which mature in November 2019.The coupon rate of these bonds is 4.15% and coupons are paid semiannually. This morning's paper quoted the bonds' price as 102.34.

(2 points) Write out the mathematical formula you would solve to find the yield to maturity of these bonds.Make sure you plug in numbers!

(1 point) What is the yield to maturity of these bonds?

(2 points) The most recent dividend paid by Microsoft was $6.72 per share.If dividends are expected to grow at a constant rate of 3.5% per year forever and the required return on the stock is 10.1%, what should Microsoft's stock price be today?

(2 points) Booze Hound Lickers, Inc. has a policy where its annual dividend grows by 4 percent per year every year, and they intend to maintain this policy forever.Their most recent dividend was $1.14 and was paid this morning.The current price per share of this stock is $16.94. The required return on this stock is 11 percent. What will the price of this stock be 8 years from now?