1. What is a bond? What are treasury bonds, corporate bonds, municipal bonds, and foreign bonds?

2. What is the YTM on a 15 year, 6% semiannual coupon bond with a par value of $1000 that may be called in 9 years at a call price of $1080. The bond sells for $1180.

3. What is the annualized yield from #2?

4. What is bonds yield to call and annualized YTC (use info from #2)?

5. What is the bonds current yield (use info from #2)?

6. What is bonds capital gain or loss yield (use #3 and 5 for info)?

7. Find the PV of an annual bond if you have 35 years, an YTM of 10% and a coupon rate of 13%.

8. Use the same figures in #7, but now find PV if the coupon rate drops to 8%.

9. Calculate your quoted market interest rate if your inflation premium is 2%, default risk premium is 2%, maturity risk premium is 3%, liquidity premium is zero, and your real risk free rate of interest is 1%.

10. What is a bond spread?