1. You have found a municipal bond for the City of Merced, which has a coupon of 3%, maturing on September 1, 2014 (non-callable). It is currently priced at 105.526. What is its tax-equivalent yield, if your marginal tax rate (Federal and State) is 26.7%?

2.You are looking at a U.S. Treasury Strip, maturing on 12/31/24 and priced at 10417. What is its YTM?

3.Note the following:

	Issue	Par	Coupon	YTM	Price
A	XYZ Subordinated Notes Due 12/31/21	$1,000	1.80%	1.75%	$1,000.98
B	XYZ Mortgage Notes Due 12/31/39	$5,000	3.17%	3.2%	$4,978.77
C	XYZ Senior Notes Due 9/1/29	$5,000	2.75%	2.86%	$4,442.30
D	XYZ Junior Subordinated Notes Due 12/31/21	$1,000	2.25%	1.95%	$1,005.8

What is their order of payment priority?

4. Your marginal tax rate is 32.65%. You are looking at two bonds: (1) AA- rated GE general obligation bond, maturing on 12/1/24 with a YTM of 2.875% and a coupon of 4.25%; and (2) an L.A. County Flood Control District Revenue Bond, also rated AA-, maturing 5/1/25 with a price of 106.67 and a coupon of 3.5%. If you had to choose, which bond would it be, and why?

5. What is the dollar price for the following Treasuries (assume $100,000 par):

1. 84.14
2. 84.14+
3. 103.284
4. 105.059
5. 10117