(a) Assume you just deposited $1,100 into a bank account. The current real interest rate is 4.5% and inflation expected to be 8% over the next year. What nominal rate would you require from the bank over the next year? How much money will you have at the end of one year? If you are saving to buy a stereo that currently sells for $1.280, will you have enough to buy it? (4 Marks) (b) A 10-year, 7% coupon bond with a face value of $1,000 is currently selling for $831.64. Compute your rate of return if you sell the bond next year for $881.20. (4 Marks) (c) Consider a bond with an 8% annual coupon and a face value of $1,000. Complete the following table (show all your calculations). Years to maturity Yield to maturity Current Price 2 5 2 8 3 5 3 8 What relationships do you observe between maturity and discount rate and current price (12 Marks)