1. A $1,000 par value bond matures in 7 years, pays interest semiannually, and has a yield-to-maturity of 5.4 percent. Each semiannual coupon payment is $60. What is the current market price? Round your answer to the nearest cent.
2. What is a mortgage-backed security? Be sure to explain the process of securitization.
3. If you are a risk manager who is risk averse, you will require a(n)
a. decrease in return, for a given increase in risk
b. increase in return, for a given increase in risk
c. increase in return, for a given decrease in risk
d. decrease in return, for a given decrease in risk
4. If you are a risk manager who is risk averse, you will require a(n)
a. decrease in return, for a given increase in risk
b. increase in return, for a given increase in risk
c. increase in return, for a given decrease in risk
d. decrease in return, for a given decrease in risk