1. What is the present value of receiving $500.00 at the end of each year forever? Assume the interest rate is 6.00%, compounded annually.
2. What is the current yield of a bond with a 9% coupon, four years until maturity, and a price of $750?
3. Investment X offers to pay you $5,000 per year with the first payment being received today. If you secure an 11% interest rate, how many years will it take you to reach $100,000 in savings? Please do not round, show the answer in decimal form.
4. What happens to the price of a three-year bond with an 9% coupon when interest rates change from 9% to 6%.