1. A bank has agreed to lend you $840,100 for a home loan. The loan will be fully amortized over 52 years at 10.61%, with .3 points. The loan payments will be monthly. The closing cost is estimated to be $4,542.

Calculate the actuarial rate.

1.8119%

0.8918%

0.7375%

1.7524%

2. The Wake-Up Corporation's $1,000 bonds issued a year ago have an 8 percent coupon. Now the prevailing market yield is 10 percent. In this case, Wake-Up's bonds will

a. have a new 2 - percent coupon issued to raise the yield to the market yield.

b. remain unaffected by the change in market yield, and will continue to trade at $1,000.

c. have a market price of less than $1,000.

d. have a market price of greater than $1,000.