Due to a recession, expected inflation this year is only 2.75%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 2.75%. Assume that the expectations theory holds and the real risk-free rate (r*) is 1.5%. If the yield on 3-year Treasury bonds equals the 1-year yield plus 2.0%, what inflation rate is expected after Year 1? Round your answer to two decimal places. % Madsen Motors's bonds have 11 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10%, and the yield to maturity is 13%. What is the bond's current market price? Round your answer to the nearest cent. $ A bond has a $1,000 par value, 20 years to maturity, and a 5% annual coupon and sells for $860. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. % b. Assume that the yield to maturity remains constant for the next four years. What will the price be 4 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $ Nesmith Corporation's outstanding bonds have a $1,000 par value, a 12% semiannual coupon, 15 years to maturity, and a 15% YTM. What is the bond's price? Round your answer to the nearest cent