1.You just bought a Government of Canada strip bond for 80. It matures in 8 years. What is your yield to maturity on the investment?

2. You have just bought a Royal Bank Bond for 102. The bond matures in 5 years and has a coupon of 6%. What is the yield to maturity?

3. How much should you pay for a Canadian Tire Bond that matures in 4 years and has an annual interest rate of 9%, paid semi-annually, when market interest rates are 7%?

4. You are 20 years old. When you retire at age 65 you want to have saved $1,000,000. If you believe that you can earn 8% a year, compounded annually, on your investments, how much would you have to save each year to achieve your financial goal?

5. Same facts as in the question above except you just won $10,000 in a college poker tournament.

6. You just bought a Government of Canada strip bond for 90. It matures in 4 years. What is your yield to maturity on the investment?

7. You have just bought a Magna Bond for 98. The bond matures in 5 years and has a coupon of 8%. What is the yield to maturity?

8. How much should you pay for a TD Bank bond that matures in 4 years and has an annual interest rate of 7%, paid semi-annually, when market interest rates are 5%?

9. You want to retire in 20 years, and you want to have saved $2 000 000 by then. If you believe that you can earn 6% a year, compounded annually, on your investments, how much would you have to save each year to achieve your financial goal?

10. If your rent is currently $1 000 per month and you expect to retire in 10 years, and you assume that the annual inflation rate will be 2% per year how much will your rent expense be when you retire?

11. You have just retired at age 65 and you have $1 000 000 that you plan to use to buy an annuity. You believe that you will leave to be 90 years old and therefore you purchase a term annuity for 25 years. If interest rates are 5%, annual, how much will your annual payments be?

12. If interest rates are 4% and you need $10 000 in income a year, how much capital do you need to have?