1. If today, I make an investment, I will have 5 cash flows in the next five years, with 120$, 140$, 165$, 180$, 100$ respectively. Note that discount rate in the first 3 years is 8%/year and that rate in year 4, 5 is 10%/year. Compute present value of future cash flow?
2. A 3 year bond with the YTM stays at 10% per year, with a 9% coupon and the face value of 1000$. Two year later, you sell it for 900$. Assume that you reinvest the first coupon payment at 5% for one year. What is the bonds rate of return?