2.Determinants of Interest Rate for Individual SecuritiesA particular security's default risk premium is 3.60 percent. For all securities, the inflation risk premium is 2.35 percent and the real interest rate is 3.05 percent. The security's liquidity risk premium is .75 percent and maturity risk premium is .85 percent.

The security has no special covenants. What is the security's equilibrium rate of return?

3.Solving for RatesWhat annual rate of return is earned on a $3,400 investment when it grows to $7,300 in eighteen years?

4.Present Value of an AnnuityWhat is the present value of a $2,100 annuity payment over 7 years if interest rates are 11 percent?

5.Five Years Future ValueWhat is the future value of $600 deposited for five years earning 5% interest rate annually?