1. Suppose that you purchase a B- rated $5000 annual coupon bond with an 16.5% coupon bond and a 9-year maturity. The current rate on 9-year US treasuries is 3%. If you purchase it at a 7.021% discount to par value, how much did you pay?

2. Suppose that you pay a A rated $5000 annual coupon bond with an 6.8% coupon rate and a 18-year maturity at par value. The current rate on 18-year US treasuries is 3%. Two years later, you look in the newspaper, and find that the yield on comparable debt is 7.223%, how much is the bond currently worth?

3. Suppose that you purchase a Ba rated $1000 annual coupon bond with an 9.3% coupon rate and a 11 year maturity at par value. The current rate on 11-year maturity is 3%. Two years later, you sell the bond and for a yield of 5.597%. What was your capital gain (+) or capital loss (-) in cents.

4. Suppose that you have two alternatives to purchase a new Mini Cooper. You must put $2500 down and make payments of $402 per month for 48 months at the end of each month or pay $19000 cash. The dealers stated financing rate is 5.4% APR. If you pay cash for the car, how much are you saving (+) or losing (-) in comparison with financing your purchase through the dealer.