For questions below, make sure to write down the formulas you use and explain your calculations. 1. [5 marks] Suppose you take out a fixed payment loan of 1000 for 5 years. You will repay it in annual installments. Calculate the fixed payment if you know the interest on the loan is 5%. 2. [5 marks] Suppose you require a 10% return on your investments while purchasing a stock that is currently trading at $50. The company is believed to pay out dividends of $5 per share in the next two years. What is the lowest value of expected stock price 2 years from now that would make you willing to purchase the stock asuming you want to sell it at that time? 3. [5 marks] Calculate the yield-to-maturity on a coupon bond that has a 5% annual coupon rate and face value F = $100 due in 2 years from now if the bond is currently traded at price $105. 4. [5 marks] Suppose the current 1-year discount rate on US government bonds is 3% and the 2- year rate is at 6%. What is the implied expected 1-year rate next year, assuming the expectations theory is the correct theory of the yield curve