1. Define systematic and unsystematic risk. What method is used to measure a firms market risk?
2. The Boston Clothing Co. has $1,000 face value bond outstanding with a market price of $1,002. The bond pays interest annually, matures in 14 years, and has a yield to maturity of 8.7 percent. What is the coupon rate? (Enter rate in percents, accurate to two decimal places.)