1. Heath Food Corporations bonds have 23 years remaining to maturity. The bonds have a face value of $1,000 and a yield to maturity of 5%. They pay interest annually and have a 6% coupon rate. What is their current yield? Do not round intermediate calculations. Round your answer to two decimal places

2. Renfro Rentals has issued bonds that have a 9% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? Round your answer to the nearest cent.

3. The real risk-free rate is 3%. Inflation is expected to be 2% this year, 3% next year, and then 5% thereafter. The maturity risk premium is estimated to be 0.0003 (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security? Do not round intermediate calculations. Round your answer to two decimal places.

4. Bond Value as Maturity Approaches

An investor has two bonds in his portfolio. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity equal to 8.9%. One bond, Bond C, pays an annual coupon of 11%; the other bond, Bond Z, is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 8.9% over the next 4 years, what will be the price of each of the bonds at the following time periods? Assume time 0 is today. Fill in the following table. Round your answers to the nearest cent.

T	Price of Bond C	Price of Bond Z
0	$	$
1
2
3
4