11. Assume Alice is considering buying the bond described below:

• Years to maturity = 10
• Par value = $1,000
• Annual coupon rate = 8 percent annually, with interest being paid every 6 months.

If Alice expects to earn a 10 percent rate of return on this bond, the most she should pay for the bond is closest to:

	a.	$1,122.87
	b.	$875.38
	c.	$1,003.42

14. Presley Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. Presley's expected rate of return is closest to:

	a.	8.12%
	b.	8.55%
	c.	9.00%

15.

A 25-year, 8.5% annual coupon bond is currently priced at $875 per $1,000 of par. Assuming the bond's yield to maturity remains constant, its price in 5 years will be closest to:

	a.	$839.31
	b.	$882.90
	c.	$927.60