questions 1-4

1. Assume you are interested in adding a bond to your investment portfolio. You decided to buy ACME INC's corporate bond. ACME's 30 -year bond was issued 5 years ago with a par value of $1,000. The bond has a coupon rate of 9% per annum with semiannual interest payments. The yield to maturity on that bond of 11%. What is the current price of that bond and how is the bond priced (premium, discount, or par)? in1 2. At the end of each year for 8 years you deposit $35,000 into an account that earns 14% compounded annually. After the end of the 8th year you withdraw $20,000 and transfer the balance to an account that earns 10% per annum with interest compounded quarterly. The transferred amount remains in the account for 4 years. What is the expected balance in the account at that time? 3. Consider an investment portfolio with two investments: Treasury bills and Stocks. The portfolio has 65% invested in stocks and the remaining 35% invested in Treasury bills. The expected return, standard deviation, and correlation of the investments are shown are shown in the table below. Using the information provided to calculate the expected return and the standard deviation on the portfolio. 4. Assume you received a 20-year loan of $750,000 with monthly repayment. The loan has an annual interest rate of 9%. You have received a windfall inheritance and you are considering to pay off the loan balance in full. If you have 12 years remaining on the loan, what amount would be required to pay off the outstanding loan balance