Biology homework help. 1.ÿConsider a coupon bond that has a $1,000 par value and a coupon rate of 12%ÿThe bond is currently selling for $1,280 and has 12 years to maturity. What is theÿbond?s yield to maturity?2.ÿConsider a bond that promises the following cash flows.Year : ÿ ÿ ÿ ÿ ÿ ÿ ÿ ÿ ÿ ÿ ÿ ÿ 0 ÿ ÿ 1 ÿ ÿ ÿ 2 ÿ ÿ ÿ3 ÿ ÿ ÿ 4Promised Payments:ÿ ÿ ÿ150 ÿ 170 ÿ 210 ÿ 260Assuming all market interest rates are 14%, what is the duration of this bond?3.ÿYou are willing to pay $25,000 now to purchase a perpetuity which will pay youÿand your heirs $2,200 each year, forever, starting at the end of this year. If yourÿrequired rate of return does not change, how much would you be willing to pay if this were a 15-year, annual payment, ordinary annuity instead of a perpetuity?4. The demand curve and supply curve for bonds are estimated using the following equations:Demand: P = – (5/6)Q + 1400Supply: ÿ P = (1/3)Q + 700As the stock market continued to rise, the Federal Reserve felt the need toÿincrease the interest rates. As a result, the new market interest rate increased toÿ14%, but the equilibrium quantity remained unchanged. What are the new demand and supply equations? Assume parallel shifts in the equations.5. The one-year interest rate over the next 10 years will be 3%, 4.5%, 6%, 7.5%, 9%, 10.5%, 13%, 14.5%, 16%, 17.5%. Using the pure expectations theory, what will be the interest rates on a 4-year bond, 7-year bond, and 10-year bond?6. A bank has two, 3-year commercial loans with a present value of $80 million.ÿThe first is a $30 million loan that requires a single payment of $37.8 million in 3 years, with no other payments until then. The second is for $50 million. Itÿrequires an annual interest payment of $4.5 million. The principal of $50 million is due in 3 years. The general level of interest rates is 7%. What is the duration of the bank?s commercial loan portfolio?7.ÿOne-year T-bill rates are 3% currently. If interest rates are expected to go up after 4 years by 3% every year, what should be the required interest rate on a 10-year bond issued today?8.ÿCalculate the present value of a $1,000 zero-coupon bond with 8 years to maturity if the required annual interest rate is 12%.9.ÿCalculate the duration of a $1,000, 5% coupon bond with three years to maturity. Assume that all market interest rates is 8% for next three years.10.ÿAn economist has estimated that, near the point of equilibrium, the demand curveÿand supply curve for bonds can be estimated using the following equations:Demand: P =-(2/7)Q + 1000Supply: P = (1/7)Q + 700a. What is the expected equilibrium price and quantity of bonds in this market?b. Given your answer to part (a), which is the expected interest rate in this market?