1. Suppose that the equilibrium wage in industry A is $49,000. Industry B is riskier with workers having a 6% greater chance of dying on the job; the wage in industry B is $67,000. What is the implied valuation of a life year?
2. Suppose six months before maturity of the bond (right after the bond made its 23rd coupon payment), the yield-to-maturity (APR, semi-annually compounded) is 20%. If you bought a bond right after it made its 23rd coupon payment and held it until maturity, what would be your return on this investment?