Question #$1$:

Use the following information to answer the following five questions: On March $28,2008,$ Toyota Motor Credit Corporation $($TMCC$),$ a subsidiary of Toyota Motor, offered some securities for sale to the public. Under the terms of the deal, TMCC promised to repay the owner of one of these securities $$100,000$ on March $28,2038,$ but investors would receive nothing until then. Investors paid TMCC $$24,099$ for each of these securities; so they gave up $$24,099$ on March $28,2008,$ for the promise of a $$100,000$ payment $30$ years later.

Time Value of Money: Why would TMCC be willing to accept such a small amount today $($ $$24,099)$ in exchange for a promise to repay about four times that amount $($$$100,000)$ in the future?

Call Provisions: TMCC has the right to buy back the securities on the anniversary date at a price established when the securities were issued $($this feature is a term of this particular deal$).$ What impact does this feature have on the desirability of this security as an investment?

Time Value of Money: Would you be willing to pay $$24,099$ today in exchange for $$100,000$ in $30$ years? What would be the key considerations in answering yes or no$?$ Would your answer depend on who is making the promise to repay?

Investment Comparison Suppose that when TMCC offered the security for $$24,099,$ the U$.$S$.$ Treasury had offered an essentially identical security. Do you think it would have had a higher or lower price? Why?

Length of Investment The TMCC security is bought and sold on the New York Stock Exchange. If you looked at the price today, do you think the price would exceed the $$24,099$ original price? Why? If you looked in $2022,$ do you think the price would be higher or lower than today's price? Why?