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a . Your relative promises to pay you $ 5 , 0 0 0 , 1 2 years from now. What is the maximum amount

.

Your relative promises to pay you $

5, 000, 12

years from now. What is the maximum amount you would lend to your relative as of

8 / 15 / 2020 ?

Why?

.

What is the present value of risk

-

free $

1

to be received

15 -

years from as of

8 / 15 / 2020 ?

.

The bond maturing on

8 / 15 / 2040

has an ask price of $

74.309 .

Given this price show that the reported ask yield

1.511 %

is correct.

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