Q1. Three years ago you purchased a 9% coupon bond that pays semiannual coupon payments for $973. What would be your bond equivalent yield if you sold the bond for current market price of$1,055?

1) Your bond equivalent yield, if you sold the bond for current market price, is .....%. (Round to two decimalplaces.)

Q2. You notice in the WSJ a bond that is currently selling in the market for $1,056 with a coupon of 10% and a 17-year maturity. Using annual compounding, calculate the promised yield on this bond.

1) The bond's promised yield is ....%.(Round to two decimal places.)

Q3. An investor is considering the purchase of a(n) 7%,18-year corporate bond that's being priced to yield 9%. She thinks that in a year, this bond will be priced in the market to yield 8%. Using annual compounding, find the price of the bond today and in 1 year. Next, find the holding period return on thisinvestment, assuming that the investor's expectations are borne out.

1) The price of the bond today is $.... (Round to the nearest cent.)

2) The price of the bond one year from today is$..... (Round to the nearest cent.)

3) The holding period return on this investment is ....%. (Round to two decimal places.)