6-An inflation-indexed Treasury bond has a par value of $100,000 and a coupon rate of 7.5 percent with semi- annual payments. An investor purchases this bond and holds it for three years. Every year, the consumer price index increases by 5 percent per year. What are the total interest payments the investor will receive during the first year? a) $7,636 b) $7,590 c) $7,898 d) $7,500 e) $7,784 7-A $1,000 face value corporate bond with a 7.5 percent coupon (paid semiannually) has 15 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 6.55 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new yield to maturity will be 7.75 percent. What will be the change in the bond's price in percentage terms? a) -5.49% b) -12.72% c) -13.78% d) -6.35% e) -10.26% 8-30-years U.S. T-bond has a return of 8.5% and 1-year U.S. T-bill has a return of 2%. A corporate bond has a default risk premium of 1.5% and liquidity risk premium of 1.5%. The corporate bond has no special covenants. Calculate this bonds return. a) 9.5% b) 8.5% c) 11.5% d) 12.5% e) None of the above