1. An investor purchases a zero coupon bond with 20 years to maturity at a price of $362.94. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding.
2. A bond with 16 years to maturity and a semiannual coupon rate of 6.16 percent has a current yield of 5.75 percent. The bond's par value is $2,000. What is the bond's price?
3. Sweet Sue Foods has bonds outstanding with a coupon rate of 5.05 percent paid semiannually and sell for $1,971.44. The bonds have a par value of $2,000 and 17 years to maturity. What is the current yield for these bonds?
4. The inflation rate over the past year was 3.5 percent. If an investment had a real return of 8.7 percent, what was the nominal return on the investment?