3.Mike November Corps bonds have a coupon rate of 5.8%, paid semi-annually.The bonds have 9 years to maturity, and the market rate of interest is 6.6%.Assume a par value of $1000.What is Mike Novembers bonds current yield?

4.Now, assume that in problem #3, the market rate of interest falls to 6.1% over the next year.What has happened to Mike Novembers bonds capital gains yield?

5.Whiskey Tango Corps current issue of bonds has a par value of $1000 and matures in 11 years.The coupon rate of these bonds is 6.00%.The market rate of interest is 5.5%.Assume the economy is at full employment output.Now assume that the Federal Reserve engages in an expansionary monetary policy.In the near term, what is likely to happen to the market price of Whiskey Tangos bonds as a result of this monetary expansion?Briefly explain.

6.What are the specific factors that contribute to the default risk premium?Discuss at least five different factors.

7.What are the primary sources of Bond Ratings?How do Bond Ratings assess and report the risk associated with various institutions bonds?Explain.

8.A well-known technique used to assess the risk of corporate bonds is through the calculation of bond spreads.What are bond spreads?How do bond spreads relate to Default Risk and Liquidity Risk?Explain.