1) Trevor Price purchased 10-year bonds issued by Harvest Foods five years ago for $946.63. Bonds make semi annual coupon payments at the rate of 8.4 percent. If present price of bonds is $1,052.12, determine the yield that Trevor would earn by selling the bonds today?
2) First Bank of Ellicott City has issued perpetual preferred stock with $100 par value. Bank pays a quarterly dividend of $1.65 on this stock. Determine the present price of this preferred stock given a required rate of return of 13.0 percent?
3) Current-dollar government buys were $1,750 billion in 2010. With 2000 as base year, suppose the price deflator for 2010 is= 175 (or, 1.75 if you do not multiple by 100). In real dollars, year 2000 government buys would be which of the given below
i) $714 billions
ii) $857 billions
iii) $1000 billions
iv) $2188 billions