A real return annual-pay bond carrying a 3% coupon was priced at 100 at issue date. If inflation is 1% over the first year, then which of the following is true?

		The investor would receive $4,000 in interest and the bond would be worth $101,000.
		The investor would receive $3,030 in interest and the bond would be worth $101,000.
		The investor would receive $4,000 in interest and the bond would be worth $100,000.
		The investor would receive $3,000 in interest and the bond would be worth $101,000.

ABC Corp. issued a $1000 par value bond with a coupon of 12%, payable semi-annually, and 15 years remaining to maturity. If current market interest rates are 10%, what is the present value of the principal?

		$922.35
		$1153.72
		$231.38
		$228.18

ABC Corp. issued a $1000 par value bond with a coupon of 12%, payable semi-annually, and 15 years remaining to maturity. If current market interest rates are 10%, what is the present value of the stream of coupon payments?

		$228.18
		$1153.72
		$922.35
		$231.38

ABC Corporation was once a high-flying technology stock. Due to competition, it's share price declined significantly. However, it has several valuable patents and is attempting a turnaround. In order preserve cash to reinvest in the business, what type of bond issuance is most appropriate?

		A convertible bond
		A retractable bond
		A straight bond
		A callable bond.

Andrea is saving for her child's post-secondary education. Her daughter will attend college in 4 years. According to the rational expectations theory, should Andrea buy a 4-year bond or a 2-year bond and then reinvest the proceeds in another 2-year when it matures. According to the rational expectations theory, which option should Andrea choose?

		The series of 2-year bonds to provide her with more flexibility.
		The 4-year bond because longer term bonds have higher yields.
		The 4-year bond because it matches her investment timeframe.
		She should be indifferent to the choices because both will give her the same return.