1. Suppose the expected real interest rate and inflation rate are 3% and 2% for year 2021, respectively. You are exploring the C.D. account and AIG bonds. What is going to be the nominal interest rate offered by the C.D. account? AIG bonds pay an 8% risk premium based on its B credit rating. What would be the yield to maturity (YTM) on the AIG bond?

3. GM bonds have an 8 percent coupon rate, pay coupon payment semi-annually, and will mature on June 30th, 2024. The dates for semi-annual coupon payments are June 30th and Dec 31st of each year. The yield to maturity is 9 percent. Today is September 10th, 2021. How many coupon payments will investors get from this GM bonds if they purchase today? Considering Accrued Interest, what will be the invoice price of the bond as of today?

4. For the same bond in Question 3, what would be the invoice price as of March 10th, 2022? If you bought the bond on September 10, 2021 and will sell it on March 10th, 2022, what will be your holding period return rate (HPR) for the investment?