1. what is the current yield of a 30 year U.S Bonds that was issued 12 years ago, has a coupon rate of 0.04, and is currently selling for $1,030? (Answer 4 decimals)

2. what is the required return on preferred stock if the dividend is $2.5 and the current price is $72? (answer 4 decimals)

3. If a 30 year bond, issued 5 years ago, is currently priced at $950, and has a coupon rate of 5%, and pay a interest semi-annually. what is the yield to maturity?

a. 3%

b. 1.78%

c. 2.68%

d. 5.37%

4. what is the price of a U.S. 30 year bond that has 19 years left to maturity, a coupon rate of 4% (semi-annual) payments, and a yield maturity (YTM) of 6%?

a. $848.33

b. $775.08

c. $1,128.03

d. $1,000

5. what is the YTC of a semi-annual bond that is callable in 4 years at $1,020, and has a coupon rate of 6%, and is currently selling for $1,010?

a. 3.08%

b. 6.16%

c. 6.38%

d. 12%

6. given the following, what is the required return to a common stock investor?

price $45 per share. today's dividend $2 per share. growth in dividends 6% per year

a. 11%

b. 10.71%

c. 12%

d. 12.12%

7. IBM stock currently sells for $100 a share. it just paid a dividend of $3 a share. the dividend is expected to grow at a constant rate of 6% a year. what will the stock price be in 3 years?

a. $100.24

b. $106.36

c. $118

d. $119.10

8. what is the dual mandate of the FOMC

a. price stability and economic growth

b. price stability and low inflation

c. economic growth with low inflation

d. economic growth with higher prices