QUESTION 14 Kem Corporation's 5-year bonds yield 6.60% and 5-year T-bonds yield 3.40%. The real risk-free rate is r* - 2.5%, the default risk premium for Kern's bonds is DRP -1.90% versus zero for T-bonds, the liquidity premium on Kema's bonds is LP - 1.3%, and the maturity risk premium for all bonds is found with the formula MRP - (1-1) 0.1%, where t number of years to maturity. What is the inflation premium (IP) on all 5-year bonds? O a 0.38% b. 0.54% O c.0.50% Od.0.51% 0.0.48% QUESTION 15 Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 5.30%, based on semiannual compounding. What is the band's price? O a $1,200.00 b. 51,500.06 OC. $1,224.05 d. 5948.04 O. 51,164,05 Click Save and Submit QUESTION 9 You just inherited some money, and a broker offers to sell you an annuity that pays $36,800 at the end of each year for 20 years. You could earn 4% on your money in other investments with equal risk. What is the most you should pay for the annuity? a $544,957.21 Ob.$536,582.60 O $580,054.02 d. $500,124.01 Oe. $555,425.46 QUESTION 10 What's the rate of return you would earn if you paid $52,000 for a perpetuity that pays $2355 per year! O a3.42% b.4.53% O c. 7.53% Od. 2.48% O. 5.19% QUESTION 7 You want to buy a new sports car 5 years from now, and you plan to save 59,700 per year, beginning one year from today. You will deposit your savings in an account that pays 3.2% interest. How much will you have just after you make the 5th deposit, 5 years from now? A 551,761.08 Ob. 559,221 A O. 558,454,15 Od 560,565.55 O. 551,704.93