# Homework question Help Needed

**Question description**

1. A
car company coupon bond has a coupon rate of 6.5% and pays annual coupons. The
next coupon is due tomorrow and the bond matures 26 yrs. From tomorrow. The
yield on the bond issue is 6%. At what price should this bond trade today,
assuming a face value of $1,000? The price of the bond today should be? **(Round to nearest cent)**

**2.
**What is the percentage change in
price for a zero coupon bond if the yield changes from 6.5% to 5.5%? The bond
has a face value of $1,000 and it matures in 10 years. Use the price determined
from the first yield 6.5% as the base in percentage calculation. The percentage
change in the bond price if the yield changes from 6.5% to 5% is? **(Round to two decimal places)**

**3.
**With celebrity bonds, celebrity raise
money by issuing bonds to investors. The royalties from sales of music are used
to pay interest and principal on the bonds. The bond was issued with a coupon
rate of 6.5% and will mature on this day 34 years from now. The yield on the
bond is currently 6.33%. At what price should this bond trade today assuming
face value of $1,000 and annual coupons? The price of the bond today should be?
**(Round to nearest cent)**

**4.
**If the nominal rate of interest is
13.75% and the real rate of interest is 7.05%, what is the expected rate of
inflation? **(Round to Two Decimal Places)**

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