1. How much would you pay for an IBM Bond that pays a 5% coupon, matures in 20 Years and the yeild on current bonds are 7%?
2. What is the relationship between ex ante return on an investment and the price for the asset paid by the investor?
3. Would you pay 950 for a Disney Bond that pays a 6 % coupon, Matures in 15 years and current bonds are yielding 8%?