1. If the coupon rate on the bond is 8% today, and inflation is 3% per year, what is the coupon rate on the bond in 3 years?

8.74%

8%

5%

2. Assume a par of $1,000, and a coupon rate of 5.3%.If the coupon payment is made semiannually, the amount paid every six months to the bond holder is:

$53

$106

$26.50

3. If the semiannual yield to maturity on a bond is 2.25%, the annual yield to maturity is:

4.5%

2.25%

9%