b. Your friend borrows $200 today from you (i.e. a simple loan), and he agrees to pay you back $220 next year. Calculate the yield to maturity on this loan. c. Calculate the present value of a 5% coupon bond with a face value of $300, a 10% yield to maturity, and which matures two years from now. a. If Wal-Mart is currently paying an annual dividend of $0.80 per share, its dividend is expected to grow at a rate of 10% per year, and the return investors require to buy Wal-Marts stock is 12%, calculate the price per share for Wal-Marts stock. b. In October 2013, the price of Apples stock was $207 per share. At the time, Apple was paying an annual dividend of $3.40 per share. If the return investors required to buy Apples stock was 0.10, what growth rate in Apples dividend must investors have been expecting?

Use the entries below to construct a banks balance sheet/T-account with assets on the left-hand side and liabilities and bank capital on the right-hand side.

Cash, including cash items in the process of collection
Non-interest-bearing deposits
Deposits with the Federal Reserve
Commercial Loans
Real Estate Loans
Consumer Loans
Interest-bearing Deposits
Buildings and Equipment
Other Assets
Other Liabilities

Calculate the banks equity multiplier. Show your work.

You are the owner of Third Bank, which currently has the following balance sheet:

Assets	Liabilities
Reserves $175	Deposits $1,250
Loans $1,800	Bank Capital $725

Assume a 10% reserve requirement. If there is a sudden withdrawal of deposits of $100:

Briefly explain what options are available to you (as the bank owner) to deal with the resulting problem. Which of these options are you most likely to choose? Why?

Illustrate each of the following situations using the Supply and Demand framework for the bond market. Make sure that your graph shows any shifts in the demand or supply curves, the original equilibrium price and quantity, and the new equilibrium price and quantity. Also make sure to explain what is happening in your graphs.

The government runs a large budget deficit, holding everything else constant.

Households believe that future tax payments will be higher than current tax payments, so they increase their saving.

Both (a) and (b) occur.