1. The value of a bond can be calculated by discounting its cashflow, which consists of regular coupon payments and redemption of __________ at maturity, using the desired yield as the discount rate. For example, a bond whose face value is $200,000, coupon rate is 3% and is maturing in 6 years would have a value of $__________ (two decimal places, no 100 separator) and be priced at ____________(two decimal places) if the desired yield is 2%. Assume that coupons are paid twice a year.

2. Concepts learned in finance can be put to everyday use, for example, figuring out how much you should pay for a house. If your current annual rent payment is $12,000, and you expect that to increase by 3 percent each year, and you believe that _________ percent is the appropriate discount rate, you would be happy to pay $12,000,000 for a comparable house (Since there's typically not much difference between twenty/thirty year of cashflows and perpetual cashflows, assume that, for the sake of convenience, the house will last forever).

3. When a company is issuing bonds, it usually cannot issue them exactly at face (par) value because the coupon rate and the yield demanded by investors do not match exactly. For example, when a company is issuing a ten-year bond, whose coupon rate is 4%, when the yield demanded by investors is 4.0120%, the price of the bond will be ___________ (two decimal places). This means that the company would be able to raise $______________ million (two decimal places) if the total face value of the bonds issued is $50 million.

4. A security with the following characteristics is called ______________.

-> An asset representing an ownership interest in the business, sometimes subdivided into different classes. The owners of this asset usually have certain rights, including the right to share proportionately in the profits of the business and the right to elect directors and vote on proposals on certain important business decisions.

5. When the price of a firm's shares moves 5% when the whole market moves 2%, it is said that the shares of the firm has a beta of __________. In such a situation, the firm should have [higher / lower / indeterminate] costs of equity than a firm whose share price would move at the same rate as the whole market.

Thank you for your help