1. You want to earn a real rate of return of 3.64 percent at a time when the inflation rate is 2.84 percent. What is the approximate nominal rate which you must earn?
2. A bond has a par value of $1,000 and a coupon rate of 6.5 percent. What is the dollar amount of each semiannual interest payment if you own 8 of these bonds?
3. Alex purchased a $1,000 par value bond one year ago at a price of $1,016. At the time of purchase, the bond had 12 years to maturity and a 5 percent, semiannual coupon. Today, the bond has a yield to maturity of 5.25 percent. What is his realized yield as of today?
4. A Treasury bill has 40 days left to maturity. The bank discount yield on the bill is 3.75 percent. What is the effective annual rate?
5. A $40,000 face value bond matures in 64 days and has a bank discount yield of 4.5 percent. What is the current value of the bond?