Problem Four. A Macrohard Corp. bond carries an 8% coupon, paid semiannually. The par value is $1,000 and the bond matures in 6 years. If the bond currently sells for $911.37, what is its yield to maturity?

Problem Five. The Sutherland Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $30,000 per year forever. If the required return on this investment is 5.8%, how much will you pay for the policy?