(a) If a bond is paying interest such that i, = 0.05 on sums invested for a year, calculate the value of $1000 at the end of a year. (b) Imagine the nominal interest rate i=0.05 and the expected inflation is = 0.02. Calculate the real interest rate using the exact formula. (c) Imagine the nominal interest rate i=0.06 and the expected inflation is = 0.02. Calculate the real interest rate using the approximation formula. (d) The nominal interest rate i on a riskless government bond is 6%. Imagine a firm issues a bond and this bond is now associated with a risk of default such that p = 0.04. Calculate the risk premium of this bond (for a risk neutral investor). (e) Bank SAM, on its balance sheet, has assets of $100m, liabilities of $90m and capital of $10m. Calculate the Bank's capital ratio