1.Bond A, Bond B and Bond C each have par values of $1,000 and coupon rates of 10%. Bond A has 17 years left to maturity, Bond B has 2 years left to maturity, and Bond C has 10 years left to maturity. Which bond, if any, would be most sensitive to a change in required return? Explain why.

2.If the real rate of interest is estimated to be 0.70% and the nominal rate for U.S. treasuries of 6-month maturity is 1.85%, what would be the inflation premium? Keep 2 decimal places for percentages - 0.00% or 0.0000.

3.Fiat Cryshler Automobiles has a $1,000 par value bond outstanding with a coupon rate of 11% and 12 years left to maturity. The bond makes annual coupon payments. If required return is 10%, what is the value of the bond?

4.Hohnda Motor Co. has an outstanding bond with a par value of $1,000, a 12% coupon rate and 15 years left to maturity. If required return is 8%, what is the value of the bond if it makes semi-annual coupon payments?

5.Soubarou Corporation's bond currently sells for $1,035. It has a 9% coupon rate and a $1,000 par value.The bond pays annual coupon payments and it has 14 years to maturity. Calculate the current yield for Soubarou Corporation AND explain how current yield is different than yield to maturity. Keep 2 decimal places for percentages

6.Based on the information above, calculate the yield to maturity for Sourbarou Corp.

7.Generals Motor just paid a dividend of $2.30 this year. The required return on common stock is 8.50% and dividends are expected to grow at a constant rate of 4% indefinitely. What is the value of the company's stock?

8.What would happen to the value of Generals Motor stock if required return changes to 9%? Explain.