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of $12.000 staring from rate of 10%. Which deal is better? Show your calls (5) Suppose you are indifferent between two investment alternatives a consol with S1000 face value sells for $1200, and a 2-year coupon bond with face value of $1,000 and 9 coupon rate. (Poe all show all formulas and round the values to 2 decimal places.) Calculate P, - the market price of the bond at the beginning of year 1. ii. Calculate P; - the expected market price of the bond at the beginning of year 2. What is the ex-ante (expected) annual rate of return for year 1? What is the cv-ante annual rute of totam for you 21 Assume now that at the beginning of year 2, the consol price unexpectedly rises to $1500 iv. Calculate P2* - the new bond price for year 2. Calculate RET, - the ex-post (realized) rate of return on the bond in year 1. Calculate RET, - the ex-post rate of return on the bond in year 2. vi of $12.000 staring from rate of 10%. Which deal is better? Show your calls (5) Suppose you are indifferent between two investment alternatives a consol with S1000 face value sells for $1200, and a 2-year coupon bond with face value of $1,000 and 9 coupon rate. (Poe all show all formulas and round the values to 2 decimal places.) Calculate P, - the market price of the bond at the beginning of year 1. ii. Calculate P; - the expected market price of the bond at the beginning of year 2. What is the ex-ante (expected) annual rate of return for year 1? What is the cv-ante annual rute of totam for you 21 Assume now that at the beginning of year 2, the consol price unexpectedly rises to $1500 iv. Calculate P2* - the new bond price for year 2. Calculate RET, - the ex-post (realized) rate of return on the bond in year 1. Calculate RET, - the ex-post rate of return on the bond in year 2. vi

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