assigment busimess

Assignment - Word References Mailings Review View Help Tell me what you want to do QI. You are 21 years old today. Your grandparents set up a trust fund that will pay you $25,000 per year for 20 years, starting on your 65th birthday to supplement your retirement. If the trust can car 7.5% per year, how much will your grandparents need to put in the trust fund today (rounded to the nearest ten dollars)? CLO 3[2.5 Marks) Q2. It is your 6th birthday today. You have a trust fund with $50,000 that is earning 8% per year. You expect to withdraw $30,000 per year for 7 years starting on your 22nd birthday for graduate school. How much money will be left in the trust fund after your last withdrawal (rounded to the nearest S10)? CLO 3[2.5 Marks Q3. You are considering a security with the following possible rates of return: a. Calculate the expected rate of return b. Calculate the standard deviation of the retums. CLO 4[5Marks) Retum/% 9.5 0.25 0.50 0.10 Probability 0.15 136 14.9 25.3 04. FYI bonds have a par value of $1,000. The bonds pay $40 in interest every six months and will mature in 10 years CLO 55Marks] a. Calculate the price if the yield to maturity on the bonds is 7,8, and 9 percent, respectively. b. Explain the impact on price if the required rate of return decreases. c. Compute the coupon rate on the bonds. How does the relationship between the coupon rate and the yield to maturity determine how a bond's price will compare to it par value? RI C