1.

Suppose the real rate is 4.5 percent and the inflation rate is 2.6 percent. What rate would you expect to see on a Treasury bill?

7.22%

7.94%

6.13%

6.50%

8.30%

2.

Seether Co. wants to issue new 15-year bonds for some much-needed expansion projects. The company currently has 6.8 percent coupon bonds on the market that sell for $864.96, make semiannual payments, and mature in 15 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?

8.40%

4.20%

8.10%

8.70%

8.30%