1.You make $7,200 annual deposits into a retirement account that pays 11.3 percent interest compounded monthly. How large will your account balance be in 33 years?

3. A bond that pays interest annually yields a rate of return of 9.25 percent. The inflation rate for the same period is 4 percent. What is the real rate of return on this bond?

4.00 percent

1.05 percent

13.25 percent

5.05 percent

2.31 percent

4. If Treasury bills are currently paying 3.2 percent and the inflation rate is 2.8 percent, what is the approximate real rate of interest? The exact real rate?

0.40 percent; 0.39 percent

0.40 percent; 3.98 percent

6.00 percent; 5.67 percent

6.00 percent; 5.87 percent

6.00 percent; 5.92 percent

5. Best Western has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in three years, and have a 5 percent coupon. The current price is quoted at 101. What is the yield to maturity?

2.32 percent

4.64 percent

5.00 percent

5.13 percent

5.27 percent

6. Wine and Roses, Inc. offers a 8.0 percent coupon bond with semiannual payments and a yield to maturity of 8.66 percent. The bonds mature in 16 years. What is the market price of a $1,000 face value bond?

	$1,629.26
	$943.42
	$1,685.84
	$1,257.58
	$1,167.47