The British government has a Consol bond outstanding that pa…

The British government has a Consol bond outstanding that pays 100 British Pounds in interest each year forever.   Assuming that the current interest rate in Great Britain is 9% and that you will receive your first interest payment one year from now, then the value of the Consol bond is closest to:

You are looking at an account statement from your bank, Mado…

You are looking at an account statement from your bank, Madoff Mutual.  You note that the statement has listed an nominal rate of 8.0%.  You believe inflation is going to be 5.25%.  You were planning to invest $100 in this account.  If you are correct about inflation, how much would you have in the account at the end of 1 year, and how much would it be worth in today’s dollars?

The Ford Prefect Company has bonds outstanding with a face v…

The Ford Prefect Company has bonds outstanding with a face value of $1,000 that reach maturity in 15 years.  The bond’s indenture indicates that the stated coupon rate for this bond is 12% and that the coupon payments are to be made semiannually.  Assuming the appropriate YTM on the bond is 7%, then the price that this bond trades for will be closest to:

The Ford Prefect Company has bonds outstanding with a face v…

The Ford Prefect Company has bonds outstanding with a face value of $1,000 that reach maturity in 15 years.  The bond’s indenture indicates that the stated coupon rate for this bond is 10% and that the coupon payments are to be made semiannually.  Assuming the appropriate YTM on the bond is 6%, then the price that this bond trades for will be closest to:

Dagny Taggart has just purchased a home and taken out a $300…

Dagny Taggart has just purchased a home and taken out a $300,000 mortgage. The mortgage has a 30-year term with monthly payments and has an APR of 4.4%. The total amount of principal that Dagny will pay during the first three months of her mortgage is closest to:

Dagny Taggart has just purchased a home and taken out a $500…

Dagny Taggart has just purchased a home and taken out a $500,000 mortgage. The mortgage has a 30-year term with monthly payments and has an APR of 3.4%.The total amount of principal that Dagny will pay during the first three months of her mortgage is closest to: