What is the price of the bond

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1. A STRIPS with 17 years until maturity and a face value of $10,000 is trading for $7,576. What is the yield to maturity?

2. A municipal bond with a coupon rate of 4.3 percent has a yield to maturity of 5.3 percent. Assume a face value of $5,000. If the bond has 10 years to maturity, what is the price of the bond?

3. CAPM AND PORTFOLIO RETURN You have been managing a $5 million portfolio that has a beta of 1.55 and a required rate of return of 10%. The current risk-free rate is 6.25%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.15, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. %____.

Reference no: EM132010287

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