A BOND IS DUE IN 2 YEARS $100,000 PAR COUPON RATE 1%. THE PRICE IS 99. WRITE THE EQUATION TO DETERMINE THE INVESTMENT BASIS YIELD, AND GIVE ANY ADDITIONAL INDSTRUCTIONS TO SOLVE FOR THE RATE?

10. A U.S. government bond of 20-year maturity has an interest rate of 3%. A likely-plausible yield is

A. 4% on a AAA 20-year corporate bond

B. 4% on a AAA municipal bond

C. 4% on commercial paper

D. 4% on Treasury bills

11. Value stocks

A. low price-to-book

B. high PE

C. low dividend

D. technology

12. THESE WERE FIGURES FOR AMAZON TWO YEARS AGO

STOCK PRICE = $1,846

NET INCOME = $10,000,000,000

STOCKHOLDERS EQUITY = $44,000,000,000

SHARES OUTSTANDING = 414,940,000

FIND PRICE-EARNINGS RATIO

1. $24.10
2. 304
3. 76.6

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