What would happen to bonds price

Reference no: EM133196976

Assignment:

1. If the present value PV=$1000 and the future cash flow in a three year CF= $2197. Find the interest rate?

2. If the total cost of an undergraduate degree at UCR is $82,000. After graduation, suppose that a student needs an annual salary of $ 44,100 for two years to get his/her money back. Find the interest rate?

3. Given a 10%-Coupon-Rate Bond Maturing in Two Years (Face Value = $2,000).

a. Find the yield to maturity (%) if the bond price is $1568?

b. If the yield to maturity if 17%, find the bond price?

4. Suppose that the nominal interest rate is 6%. If the nominal rate is three times of the real interest rate. Find the inflation rate?

5. If both riskiness of bonds and government budget deficit increase, what would happen to bonds prices? Show these changes in a graph?

Reference no: EM133196976

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