1.

Which of the following bonds would have the highest percentage change in value if all interest rates in the economy decrease by 1%?

Group of answer choices

20-year, zero coupon bond.

20-year, 5% coupon bond.

10-year, zero coupon bond.

1-year, 10% coupon bond.

20-year, 10% coupon bond.

2.

Suppose you are signing a loan contract of $65,000 at an interest rate of 8.5%. You must make 5 equal payments at the end of the year for 5 years. How much would you still owe at the end of the first year, after you make the first payment?

Answer just the dollar amount without the + or - sign. Round to the nearest dollar.

3.

A public company's bonds have a $1,000 par value, mature in 25 years, pay interest semiannually, and sell at a price of $750. The nominal yield to maturity is 9.25%. What is the bond's nominal coupon interest rate?

Answer just the number without the % sign. Round to two decimal places.