a)You purchase a 3-year US government bond with a face value of 1,000 and semi-annual coupon payments amounting to 25. The bond will still make six coupon payments plus pay back the principal. If the semi-annual yield to maturity is currently 5%, the present value of this bond would be?

b) Computer stocks currently provide an expected rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of 2 per share. If the stock is selling at 50 per share, what must be the markets expectation of the growth rate of MBI dividends?

c)Consider a 5-year bond with a 10% coupon that has a present yield to maturity of 8%. If interest rates remain constant, one year from now the price of this bond will be