Brisby Inc.'s bonds currently sell for $800 and have a par value of $1,000. They pay a $100 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,200. What is their Capital Gain Yield (CGY)?

Johnson's Corporation's bonds have a 10-year maturity, a 10.00% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 2.00%, based on semiannual compounding. What is the bond's price?

If the pure expectations theory holds, what does the market expect will be the interest rate (expected return rate)on one-year securities, three years from now? (1year maturity yield is 6.0%;2year maturity yield is 6.1%;3year maturity yield is 6.3%;4year maturity yield is 6.3 %;5year maturity yield is 6.3%)? (Hints: Draw the timeline and then calculate the interest rate(expected return rate) on two-year securities, two years from now.)