1.

Suppose the real rate is 3.0 percent and the inflation rate is 4.6 percent.

What rate would you expect to see on a Treasury bill?

2.

Backwater Corp. has 8 percent coupon bonds making annual payments with a YTM of 7.5 percent. The current yield on these bonds is 7.85 percent.

How many years do these bonds have left until they mature?

3.

Ninja Co. issued 12-year bonds a year ago at a coupon rate of 7.2 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.5 percent, what is the current bond price?

4.

A Japanese company has a bond outstanding that sells for 86 percent of its