25

Term (years)	Today's Rate
1	2.11%
2	2.30%
3	2.48%

Based on the expectations hypothesis, what does the market expect the 2 year rate in 1 years to be?

State your answer as a percentage to 2 decimal places (e.g., 4.39)

26

Term (years)	Today's Rate
1	2.07%
2	2.29%
3	2.52%

Based on the expectations hypothesis, what does the market expect the 1 year rate in 2 years to be?

State your answer as a percentage to 2 decimal places (e.g., 4.39)

27

Bond A has the following features:

Face value = $1,000,

Coupon Rate = 9%,

Maturity = 9 years, Yearly coupons

The market interest rate is 4.56%

If interest rates remain at 4.56%, what will the price of bond A be in year 1?

28

How much would you pay today for a bond that has a face value of $1,000, and annual coupon of $74 and a maturity of 9 years? (=what is the price of the bond?)

The annual interest rate is 6.44%?

29

Given the following information, what is TODAYs stock price?

Todays Dividend =	$4.63
Expected Growth rate in dividends =	2.82
Discount Rate (Required return) =	5.68

Calculate your answer to the nearest penny (e.g., 2.51)

30

Given the following information, what is the percentage capital gain/loss between today and period 1?

Calculate your answer to two decimal places (e.g., 2.51)

If there is a loss indicate this by using a negative number (e.g., -4.29)

Todays Dividend =	$2.02
Expected Growth rate in dividends =	4.19
Discount Rate (Required return) =	7.62