problem1. Suppose in 2007, an athlete signed a contract reported to be worth $280 million. The contract called for $3.25 million instantaneously and $32 million in 2008. The remaining $244.75 million was to be paid as $28 million in 2009, $28 million in 2010, $27 million in 2011, $25 million in 2012, $37 million in 2013, $30 million in 2014, $26 million in 2015, $25 million in 2016 and $18.75 million in 2017.

If the appropriate interest rate is 11 percent, what type of deal did the athlete snag? Suppose all payments other than the first $3.25 million are paid at the end of year

Compute the Present Value:

problem2.  Assuring the bond is bought at a market level, given the bond information and actual reinvestment rates, compute the realized rate of return. Face value = $1,000 coupon rate = 5% maturity = 5 payment = annual 1F2=10% 2F3=9% 3F4=11% 4F5=9%

problem3. What’s the yield to maturity of the following bond if it is bought at market level?

Face value = $1000

Coupon rate = 5%

Maturity = 5

Payment = annual.

You plan to make 25 annual deposits of $24000 into a retirement account. with first deposit being made 4 years from now, how much will be in the account in 39 years if the interest rate is 9%?

problem4. While the US Federal Reserve continues to purchase bonds in order to keep interest rates low, The Chinese authorities have been tightening the monetary policy in an effort to cool down the economy. What will be the impact these instantaneous policies on the dollar/RMB rate and the balance of trade between two countries?