4. At your favorite bond store, Bonds-R-Us, you see the following prices: 1 1-year $100 zero selling for $90.19 3-year 10% coupon $1000 par bond selling for $1000 2-year 10% coupon $1000 par bond selling for $1000 Assume that the pure expectations theory for the term structure of interest rates holds, no liquidity or maturity premium exists, and the bonds are equally risky. What is the implied 1-year rate two years from now? 5. At the beginning of the year, you purchased a share of stock of IBM for $35. Over the year the dividends paid on the stock were $2.75 per share. A Calculate the return if the price of the stock at the end of the year is $30. B Calculate the return if the price of the stock at the end of the year is $40. C Suppose that the annualized yield on 91-days T- bills (the riskless rate you use) is 3%, expected market return is 11%, and IBM's B risk is estimated to be 1.5. What is the Risk-adjusted return for the IBM? D Suppose that over the next year the dividends paid on the IBM stock are expected increase to $5.00 per share, and to growth at a constant rate of 10% per year. What is the price of share