1. What is the accumulated (future) sum of monthly contributions of $500 invested at an average return of 5% p.a. over 30 years? What if the average return increases to 8% from the 16th year? (10 marks) 2. A bond with exactly five years until maturity paying 6% p.a. coupons semi- annually and with a face value of $100 was purchased at a yield of 6.5% p.a. The bond was sold exactly two years later for a yield of 5% p.a. All coupons were reinvested at 6% p.a. Calculate the realised yield-to-maturity on this bond. (20 marks) 3. Commonwealth Bank agrees to establish a 270-day bill facility using 90-day bank bills. The face value of the facility is $10 million, and the issuer is charged an acceptance fee of 60 basis points. Calculate the net cash ows from 1) the issuer's and 2) the bank's perspective, respectively. Briey explain what each of the cash ows stands for. (The first parcel is issued at a market yield of 4.80% p.a., the second at