1. If you pay $1200 today for a new $1000 face value two-year bond with a 8% coupon rate, your rate of return, or yield to maturity is
   1. 8%
   2. More than 8%
   3. Less than 8%
   4. Need more information to calculate
2. Base on the Pure Expectations Theory of interest rates, if the one-year rate is 4%, and the one-year rate, one year from now, is expected to be 10% the current two-year rate should be
   1. 7%
   2. 3%
   3. 6%
   4. 14%
3. If you pay $1000 today for a new $1000 face value two-year bond with a 5% coupon rate, your rate of return, or yield to maturity is
   1. 5% (1000 x .05 = 50 = 5% per year
   2. More than 5%
   3. Less than 5%
   4. Need more information to calculate