1. Ackerman Co. has 7 percent coupon bonds on the market with twelve years left to maturity. The bonds make annual payments. If the bond currently sells for $1,055.17, what is its YTM? Assume a par value of $1,000.

a. 9.68%

b. 6.33%

c. 7.68%

d. 6.73%

e. 7.30%

2. The Bad Guys Company is notoriously known as a slow-payer. It currently needs to borrow $25,000 and only one company will even deal with Bad Guys. The terms of the loan call for daily payments of $30.76. The first payment is due today. The interest rate is 21% compounded daily. What is the time period of this loan?

2.88 years

2.94 years

3.00 years

3.13 years

3.25 years