3.Bond Valuation an investor has two bonds in his portfolio that both have a face value of $1.000 and pay a 10 percent annual coupon. Bond L matures in 15 years. While bond S matures in 1 year. What will the value of each bond be if the going of interest rate is 5 percent, 8 percent, and 12 percent? Assume that there is only one interest payment to be made on Bond S, at its maturity, and 15 more payments on Bond L.

Wo firms, a and b, each currently dump 50 tons of chemicals into the local river. the government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. it costs firm a $100 for each ton of pollution that it eliminates before it reaches the river, and it costs firm b $50 for each ton of pollution that it eliminates before it reaches the river. the government gives each firm 20 pollution permits. government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. what is the total cost of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? what is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? a. $3,000; $1,500 b. $4,500; $3,500 c. $4,500; $4,000 d. $4,500; $2,500