James Bonds have a coupon rate of 8% with semiannual interest payments, a face value of $1,000, and 7 years to go until maturity. Barry Bonds have a coupon rate of 9% with semiannual interest payments, a face value of $1,000, and 9 years to go until maturity.

However, they can be called in 3 years for a call premium of $1,040. Kelly Bonds have a coupon rate of 10% with semiannual interest payments, a face value of $1,000,and 20 years to go until maturity.

However, they can be called in 8 years for a call premium of $1,020.

1. If the Kelly bonds have a price of $1,080, then what is the expected return (there is both a Yield to Maturity and a Yield to Call)?

a) 8% b) 8.4% c) 8.75% d) 9.1%

2. If the James bonds have a current yield of 7%, then how much are they worth?

a) $950 b) $1,025 c) $1,075 d) $1,150

3. If the Barry bonds have a yield to maturity of 11%, then how much are they worth?

a) $888 b) $945 c) $1,020 d) $1,080