1. The Boston Clothing Co

1. The Boston Clothing Co

1. The Boston Clothing Co. has $1,000 face value bond outstanding with a market price of $1,011. The bond pays interest annually, matures in 13 years, and has a yield to maturity of 7.2 percent. What is the coupon rate? (Enter rate in percents, accurate to two decimal places.)2. Your family owns a velociraptor skeleton that is currently valued at $89.3 thousand. Your grandfather, being an avid fossil collector, bought it 50 years ago for $23.7 thousand. If the skeleton keeps appreciating at the same average annual rate, what would be its value 25 years from now?3. You would like to establish a trust fund that would pay annual payments to your heirs of $108 thousand a year forever. You expect the trust fund to earn an average return of 7.43 percent. How much do you need to deposit into this trust fund today to achieve your goal?4. You are thinking of investing in a project that will pay you $100,000 5 years from now, and another $100,000 10 years from now. You think the right discount rate for the project is 8.2%. What is the maximum you should be willing to pay for this investment?5. Last year, you earned a rate of return of 8.49 percent on your bond investments. During that time, the inflation rate was 2.53 percent. What was your real rate of return? (Enter answer in percents, accurate to two decimal places.)

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