1. Marco Chip, Inc. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 6 years and a yield to maturity of 6.00 percent, compounded semi-annually. What is the current price of the bond?
2. The equity REIT A currently (current time is end of 2005) trades at $120/share. In the past year, the realized rate of return on A has been 10%, and A’s cap rate at the beginning of year was 13%. REIT A distributed all of its NOI in the past year to its shareholders in the form of dividends. What was the trading price of A at the beginning of 2005?