Seether Co. wants to issue new 11-year bonds for some much-needed expansion projects. The company currently has 9.0 percent coupon bonds on the market that sell for $1,185.62, make semiannual payments, and mature in 11 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?

Multiple Choice

• 6.90%

• 3.30%

• 6.30%

• 6.50%

• 6.60%

You want to have $1.5 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 12 percent and the inflation rate is 5.5 percent. What real amount must you deposit each year to achieve your goal? (Do not round your intermediate calculations.)

Multiple Choice

• $9,306.8

• $1,955.44

• $9,772.14

• $9,679.07

• $8,841.46

Kiss the Sky Enterprises has bonds on the market making annual payments, with 13 years to maturity, and selling for $810. At this price, the bonds yield 8.3 percent. What must the coupon rate be on the bonds?

Multiple Choice

• 5.96%

• 8.30%

• 11.71%

• 7.23%

• 5.86%

Say you own an asset that had a total return last year of 14 percent. If the inflation rate last year was 2 percent, what was your real return?

Multiple Choice

• 11.76%

• 11.86%

• 11.66%

• -10.53%

• 11.96%