What is the bond nominal yield to call

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1. You put $9,000 in an account earning 5%. After 3 years, you make another deposit into the same account. Five years later (that is, 8 years after your original $9,000 deposit), the account balance is $20,000. What was the amount of the deposit at the end of year 3?

2. Arsenal Corporation has a bond outstanding with 16 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 7.80% nominal yield to maturity, but it can be called in 5 years at a price of $1,150. What is the bond’s nominal yield to call?

3. Freeport Company’s stock has a 20% chance of producing a 30% return, a 60% chance of producing a 12% return, and a 20% chance of producing a ?18% return. What is the firm’s expected rate of return?

Reference no: EM132011653

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