1. Which one of the following bonds is the most sensitive to changes in market interest rates?
5-year, zero coupon
5-year, 5 percent coupon 5-year,
8 percent coupon 10-year, zero coupon
10-year, 5 percent coupon
2. Monty purchased a new motorcycle for $28,000 and has a monthly payment of $522.00 over 60 months. Calculate the nominal interest rate for this transaction.
3. Y3K has sales of $6,239, total assets of $2,855, and debt-equity ratio of 1.30. If its return on equity is 15 percent, what is its net income? Please show your work.