Consider the following $1,000 par value zero-coupon bonds: Bond A B C D E 10.96% 21.54% The expected 1-year interest rate 2 years from now should be 8.41% Years to Maturity 1 2 17.54% 3 4 5 Yield to Maturity 5.40% 6.90% 7.40% 7.90% 10.50%

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Consider the following $1,000 par value zero-coupon bonds: Bond Maturity A 1 BU C D Years until Yield to Interest rate 2 3 Maturity (years) 1 2 3 4 Maturity 8.00% 9.00 9.50 10.00 Required: a. According to the expectations hypothesis, what is the market's expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What are the expected values of next year's yields on bonds with maturities of (a) 1 year; (b) 2 years; (c) 3 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) YTM Check my work % % % %

Part 1 Consider a​ five-year, default-free bond with annual coupons of 5% and a face value of $1,000 and assume​ zero-coupon yields on​ default-free securities are as summarized in the following​ table: Maturity 1 year 2 years 3 years 4 years 5 years ​Zero-Coupon Yields 4.00​% 4.30​% 4.50​% 4.70​% 4.80​% a. What is the yield to maturity on this​ bond? b. If the yield to maturity on this bond increased to 5.20%​, what would the new price​ be?

Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity 1 YTM(%) 5.6% 2 3 4 6.6 7.1 7.6 According to the expectations hypothesis, what is the market's expectation of the yield curve one year from now? Specifically, what are the expected values of next year's yields on bonds with maturities of (a) one year? (b) two years? (c) three years? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) APCO D Bond Years to Maturity YTM (%) B 1 % C 2 % D 3 %

Manshuk

Sunnyfax Publishing pays out all its earnings and has a share price of $37.00. In order to expand, Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of 14%. If the reinvestment does not affect Sunnyfax's equity cost of capital, what is the expected share price as a consequence of this decision? O$45.87 $40.14 $68.81 $57.34

What is the yield to maturity of a five-year, $5,000 bond with a 4.4% coupon rate and semiannual coupons if this bond is currently trading for a price of $4,704? OA: 5.78% B. 6.93% C. 2.89% OD. 8.09%