1. You want to have $3 million in real dollars in an account when you retire in 20 years. The nominal return on your investment is 11 percent and the inflation rate is 4.2 percent. What real amount must you deposit each year to achieve your goal?
2. Heginbotham Corp. issued 10-year bonds two years ago at a coupon rate of 9 percent. The bonds make semiannual payments. If these bonds currently sell for 102 percent of par value, what is the YTM?