1. You purchase a bond with an invoice price of $1,470. The bond has a coupon rate of 8.2 percent, and there are 3 months to the next semiannual coupon date. What is the clean price of the bond? Assume a par value of $1,000.

• $1,449.50

• $1,429.10

• $1,409.00

• $1,460.50

• $1,429.50

  2.

  Chamberlain Co. wants to issue new 18-year bonds for some much-needed expansion projects. The company currently has 9.0 percent coupon bonds on the market that sell for $1,202.90, make semiannual payments, and mature in 18 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Assume a par value of $1,000.

  Multiple Choice

• 7.30%

• 6.90%

• 3.50%

• 7.00%

• 6.70%

• 3. You want to have $2 million in real dollars in an account when you retire in 50 years. The nominal return on your investment is 12 percent and the inflation rate is 5 percent. What real amount must you deposit each year to achieve your goal?