1. What is the yield to call of a 20-year to maturity bond that pays a coupon rate of 14.54 percent per year, has a $1,000 par value, and is currently priced at $1,375? The bond can be called back in 3 years at a call price $1,075. Assume annual coupon payments.
2. Consider a forward contract on 100 troy ounces of gold. The contract is for 12 months.
Current spot is $325 per troy ounce and storage costs are $2.00 per ounce payable at contract maturity. The risk free rate is 4% per annum. Calculate the no arbitrage forward price.